Kev,
I have a 5th gen 30 gigs video one, and it's really quite good.
Itunes will play both your existing MP3s and their own format, but when you import your CDs it will transform them into apple's own format.
You basically have to have the library on your PC first, then copy it across to the ipod once you connect it.
At the beginning I found it quite confusing as I didn't want to have all the songs both on my PC AND on the Ipod, and if you don't set it up correctly, it'll synchronise both and wipe out IPOD stuff you spent ages to put on, simply because you got ird of it on your PC.
Videos are quite nice too.
You cn easily create your own playlists.