Knowing nothing about an IPOD, I believe that the original had a firewire connection and a 4gig microdrive. At about 200 bucks this would be an expensive trial since you can now buy a 4gig microdrive for about 90 bucks that will plug into any usb port and be recognized. Even better you can buy a 80gig drive for 50 bucks and a usb adapter case for 30 bucks that will be an adequate external drive.
If you just want to experiment and take a chance on destroying your IPOD then go to: http://www.ipodhacks.com/
and learn from hackers that have done a few things with the IPOD. Bear in mind that the IPOD is Apple and has a proprietary firmware that has to be hacked to make it do any thing different than the design criteria. This is most likely illegal under the 2000 milinimun act which prevents you from copying, or altering proprietary data.
ipod as portable hard-drive
I think it maybe possible to connect an ipod as a portable hard-drive if you take a psp usb cable (HipGear PSP 8 Ft. USB Cable) cut of the USB end, which goes in to the computer and take an ipod cable (Cicero iPod USB 2.0 Data Cable) and also cut of the USB end witch goes into the computernd one more thing you would have to put the two ends together that you cut off
And as you format you memory stick (root directory) for the psp you would have to make the same files in the ipod
As you open our ipod folder add file
1. PSP--> GAME, MUSIC, PHOTO, SAVEDATA
2. MP_ROOT--> 100MNV01-->
i think this is really possible
What are our thoughts on this any one?
if anyone has any info to add please do so
I will try this as soon as I receive my psp

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic