If this Mac gets hosed, I presume I could go out and get OS X and load either OS 9.2 or OS X from scratch. Is this right?

Thats right. They are both bootable discs, and install is easy. Install OS 9 first if you want classic support in OS X. Wasn't aware the iPod needed 9.2, then again I don't own one (yet), and havn't spent more then 30 mins in OS 9. The instability was just thrid hand info from people who probably stress the OS more then you will.

And I suppose I might as well advertise that I have a mac for sale. I;m still waiting on it to ship back from a friend who borrowed it, but he can directly ship it wherever in the US. It's a iMac DV SE, 500mhz G3, 30gb drive, DVD drive, Apple Pro keyboard and mouse, and all the origional software disks for OS 9. It has 2 firewire and 2 USB ports, as well as ethernet, modem, and VGA out. OS X runs decently on it, though a licensed copy will not accompany it, I need that for my G4 Cube that replaced the iMac. I'm looking for around $600-$700 for it, case and system is in perfect condition. I'll check the memory amount, can't remember how much I sent it with.