The syncing process died at around the 667th song with an error message that there was sufficient space for the operation. I first checked my HDD thinking it ran out of space, but it didn't. I checked my iPod and I see that it had only 800mb left and nothing listed under Music or Audiobooks.
Problem: It appears that Mediamonkey copies all of the FLACs to the device first and then transcodes. No wonder why the copying process went so slowly! I don't know if any files managed to be transcoded because the process died during the copying phase. (edit: apparently, the FLACs are copied to the device and renamed to mp3, see below)
Afterwards, nothing is listed under Music, Videos, or Audiobooks. The summary tab says that there is 53.5gb of free space (as does iTunes 10.6), but the capacity bar (see in the pic below) says otherwise unless the capacity bar simply means calculated capacity after a successful sync
On MM3, I did this mass sync last year and it seemed that it individually transcoded FLACs to mp3s on my HDD first and then copied the transcoded audio file over to my iPod touch running the compatible version of iOS then. I imagine the process to go like this (in tmp folder): FLAC #1 -> mp3 #1 -> Copy mp3 #1 to device -> delete FLAC #1 and mp3 #1 from tmp directory; FLAC #2 -> mp3 #2 -> Copy mp3 #2 to device -> delete FLAC #2 and mp3 #2 from tmp directory; etc.
Interestingly, I dragged and dropped two FLACs to my iPod touch folder in Mediamonkey and I found that the FLACs were renamed to mp3 and not transcoded (see bitrates) even though I had the rules set in place and the status bar indicated that it was transcoding the FLACs and then copying resulting mp3s to my iPod touch.
