I've heard it's possible if you're able to get drm free stuff on the ipod to work with 3rd party software.
Otherwise...
It's the drm and the software thats holds me back from purchasing the ipod craze stuff...
The cheapest SD-card player does the job more then well ; it's way smaller then the regular ipod, it plays any music format ( not just the drm crippled format.. ) and it's way cheaper then all the a-brand stuff...
Maybe worth considering ?