So far my 30GB Video iPod has been working great and I use it almost every day while I'm writing code. (don't tell my boss!) I usually get three to four work days out of one charge and then I just plug it back into my wall charger and it's good to go.
Unfortunately the iTunes files that you purchase are downloaded in the proprietary iTunes format (AAC) and can only be played on a computer with iTunes or an iPod. You can rip your CD collection into iTunes as MP3 or AAC and then play those with a number of different programs or players. Purchased iTunes pieces can be played on up to five different machines which is nice so you're not tied down to one computer.
Let me know if you have any other questions!