USB 1.1 is much slower than USB 2. 480Mbps compared to 12Mbps. USB 2 may provide more power too, but usually USB 2 device will work in the older ports at the slower speed.
Devices like the iPod want the higher speed, otherwise it could take you a couple of days to load up your iPod. If you only have USB 1.1, you might want to look at getting a USB 2 PCI card.
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