Download Real PLayer version 11 (
www.real.com) - this version will allow you to download the videos from YouTube (although it won't warn you about copyright - that's your own responsibility!)
I'm not familiar with the video formats supported by the iPOD - so you may have to also download an FLV converter (
www.koyotesoft.com has one) to convert flash video to avi.
A quick Google for conversion software normally shows a number of freeware packages. Just make sure you have decent anti-spyware installed (just in case!)
cheers
random