Funny, I found your post while in the middle of doing exactly the same thing.
+1
i have been working on my first iPod/iTunes the past coupld days
i have a large collection of Grateful Dead, a lifetime of collecting albeit interrupted by a theft of some of them, so i am capturing all Dead to iPod
i am learning on the fly, ( i even PM'd D-Rod for help a couple days ago but his message box was full and not receiving so i've learned on my own

)
i bought a
Classic iPod which has both the Best and Worst feature of the ipod family:
the Best: it hold 160Gb. of data (!) compared to the newer iPod Touch which holds about 1/10 of that,
the Worst: the Classic uses a (spinning) harddrive storage while the newer Touch uses Flash storage,
but the storage capabilities of the Classic, and the robustness of its drive, made it the choice i needed
i am using the 'AICC' encoder to input my files as versus the 'AAC'
songs which might have otherwise been about 4mg on my iPod are now 50mg, with some songs exceeding 200mg !!
i am archiving the Dead by album and creating playlists by year and bandmember,
i won't archive any 'best-of' albums since i will already have those songs on 'Live' albums, so i am having great luck with iTunes downloading appropriate artwork
its taken a couple days of messing around but i so far have about 40Gb of songs and have yet to get to my later years of the Dead and haven't gotten to my videos of them
because i am capturing all my songs with AICC, i bought better earphones then came with the iPod, i bought the Shure 530 which although they cost more then the iPod itself provide some great sound
i am enjoying the process, and enjoying the ability to walk my dogs while listening