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I'm going to put this under Tech Tips since it involves some pretty decent wizardry.
I didn't know this, but apparently the iPod has the ability to record, but Apple has crippled that functionality presumably to make 'opportunities' available to third party vendors like Belkin.
Hack A Day shows you how to enable high quality recording direct from your iPod.
Warning: If you end up with an iPaperWeight, it's not my fault!