But you need Apple software to convert music files to Apple's proprietary AAC format. AFAIK that conversion is a one way process, so you can't upload songs from your iPod to a computer.
Apple have just ditched their DRM software for new songs, which restricted songs downloaded from their iTunes site to run on an iPod only. Older songs downloaded with DRM aren't free'd up, just the new ones. I haven't read how well this functions, having never owned an iPod, but it seems a great advance.