had a scootle over to
http://www.ilounge.com and found this
article, which shows how to convert stuff with iTunes.
The comments section is worth reviewing for feedback - looks like some folks are struggling with sound missing or out of sync, but there's lots of alternate software suggested.
I haven't tried any video yet as my iPod is a 60Gb photo model - do you know if this can play video after the firmware upgrade, or is it only the latest iPod video and nano models that can do video playback?