Don't forget you can also download 'Podcasts'. Do a search for podcast or look here
http://en.wikipedia.org/wiki/Podcast for a rundown of what it is.
Here is a place where you can download talking books for free
http://www.podiobooks.com/
Also have a look at the BBC Radio website as you can download radio shows, some excellent ones from Radio Four are available as well as all the other stations. All you do is download the programme onto the ipod then listen to it when you like.
I would go for a four or eight gig ipod nano, you can't go much wrong with one of these.
When you get the ipod, you will have to download itunes that is included on the instaltion disc that comes with it. Once that is done, it will update to the latest version and you can then look in the itunes shop for talking books etc that you can buy instantly.
It is really easy to be honest, ask Keef!!!
(Just kidding)....