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You should be able to take out the internal hard drive and put it in an enclosure kit and thus turning it into an external drive. Though the iPod is already capable of functioning ass an external drive and even as a bootable drive for the Macs.
There are 3rd party hacks and homebrews that lets you run linux on the iPod, play Doom, as well as play 3rd party games. Other, more legal approach includes creating text contents such as the Bible, Wikipedia, cookbooks and mix drinks recipes.
Since I cannot link directly to illegal materials, you're going to have to find them yourself.
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"AMD says 85 percent of PC users run six applications at once: antivirus, e-mail, firewall, spam protection, a pop-up blocker, and spyware protection." - PC World Magazine
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