iTunes "can't transfer file to iPod"

I connected my iPod to my PowerBook and opened iTunes. The iPod normally gets
updated automatically, but I got the message "iTunes can't transfer the file
[movie.mp4] because it can't be found" (or similar wording). I ejected the
iPod and disconnected it, and I confirmed that the movie files are still on
the iPod

I'm sure I got this message because I deleted the originals to save disk
space after I transferred them to the iPod.

The files are listed under iTunes' Movies pane, even though the files
themselves have been trashed via Finder.

I'm OK with not having the original files around, but is iTunes? Will iTunes
attempt to remove the movie files when I next connect to the iPod? In other
words, is it iTunes' job to remove files that have been removed from iTunes
(or on the hard disk) as well as add new ones that have been added to iTunes?

Most confusing is why iTunes attempted to transfer files to the iPod that are
already there...

Ideas?

Some foot notes:
- The "Copy files to iTunes Music folder when adding to library" option is
un-checked in Preferences (so as to save disk space)
- The Movies option is checked on the main iPod pane when the iPod is
connected

Thanks,
--
John English

PowerBook G3/400
OS X 10.3.9
iTunes v7.0.2
iPod Video (30 GB) v1.2.1