Why an IPOD? There are a LOT of different MP3 players out there. Any of the Sansa models will work to downloadbooks from your local library. Check with your library for compatible devices. If you're only using it for books, you will only need 4-8GB of storage. I have 4GB and never run out of space.
I actually have my MP3 player built into my Sony Ericsson phone. It works really great. I have my story going and the phone rings...my book is automatically put on hold while the call answers. Once the call is finished, my book is resumed at the place I left off. It's great and I don't have to carry an extra electronic device. The phone is sold through AT&T, is Bluetooth compatible (mine has A2DP technology), or you can also use an earbud. I don't like having 2 earbuds in my ears because then I'm oblivious to the world around me. My foster kids get into enough trouble with me watching them.