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I've had iPods for a couple of years now, and I can't see myself using anything else.
You may use iTunes, but there are tons of workarounds in case you'd rather use something else. iTunes is horrible in the first couple of days (or weeks, if you're a slow learner), but once you get the gist of it, it's nothing short of awesome. You transfer mp3's, aac's, mp4's, m4a's, m4b's and wav's (not sure about flac's) to your iPod, and it works just fine.
If you want, you may ask iTunes to automatically convert files beyond a fixed bitrate in case you don't see the point in filling your iPod with 720kbps mp3's if you're going to listen to your music outdoors (that's what this person you know may have had in mind). I for one convert everything to down to 128kbps.
The best thing about iPods is that you can sort your files in several different ways, having one separate section for music, one for audiobooks, one for podcasts, and one for iTunes U (these are university lectures offered on the iTunes website, so you can have the best of Oxbridge in your pocket).
I used to hate iTunes myself, but I learned to love it, and I must also say it works fine with a PC (in case you're wondering).
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