So here's the problem...the iPod uses an MP3 decoder that can handle WAV and AIFF I believe. While it is an integerated programmable chip that allows an UI and firmware updates, handling MP4 decoding in software will not be so easy to implement. For 1, it'll probably draw a lot of power, and 2, it might not be fast enough to decode very high bit-rate mp4 files, depending on the processor...dunno, we'll just have to see...