DRM
http://en.wikipedia.org/wiki/Digital_rights_management
it basically protects the file from being copied are changed.
the reason I say it's going to be crappy quality is cause itunes songs are crappy quality. Well, it's not crap but it's far from cd quality, so paying a dallor per song is a bit of a rip off in my opinion.
Ipods are more of a fashion statement for people with money. I mean look at this
http://shop.riptopia.com/Browse_Item_Details.asp/Item_ID/121/categ_id/10/parent_ids/0,10/Name/Shugabuds