Simply put, is a media player -- it plays music (and video depending on what type of iPod you buy). When you buy an iPod, it comes with an CD which installs iTunes software onto your PC. iTunes can also be downloaded directly from the Apple website.
iTunes is a jukebox program (it plays and rips music just like Windows Media Player or Winamp), and it's also where you manage the music for your iPod. If you want to add music to your iPod, there's a number of ways you can do it, but the simplest is as follows:
1. Connect your iPod up to your PC using the white USB cable that comes with your iPod.
2. Wait for iTunes to detect your iPod, and then drag music files onto the symbol of your iPod in iTunes.
That's it.
If you'd like to buy music, the iTunes Store is integrated into the iTunes program. All you have to do is click the 'Store' symbol in iTunes and you've connected to it. Just be aware that stuff you buy from iTunes comes with a form of DRM, meaning you can't just share the file with a friend.
There's a little confusion in this thread about which formats iPods can play -- they can and do play mp3 files without converting them to mp4 (more accurately referred to as AAC in an iPod/iTunes context). AAC actually has a noticeably better sound quality than mp3 -- AAC at 128Kbps will sound better than an mp3 at 160Kbps, and obviously this means the file size will be smaller.
The format iPods cannot play is WMA, but luckily iTunes can automatically convert them when you add them to your iPod.
As for iPods freezing, I've never ever had that problem. My iPod Nano has flash memory -- meaning I can work out, run around, do cartwheels, and the thing still won't freeze. Earlier generations of iPod (especially the models with large storage) may not have flash memory.
One last tip if you do decide to buy an iPod -- go to the Apple website for your country and do a search for "iPod Refurb". A refurb is a product which had some sort of defect and then had to be repaired by the company. These refurbs can sell for much, much cheaper prices, even though they look and work like a totally new product.
