Rockbox has pretty great playlist support. You can use m3u playlist you generate and drag those over or rockbox can create them. The original iPod interface is much nicer. Rockbox can be a bit cumbersome but you can find some nice themes to pretty faithfully recreate the look and feel.

Put Rockbox on it and drag and drop any audio file onto the iPod like you would any removable media. You can also play flac, ogg, and many other formats not supported by the og OS.

Big fan of the IODD. I love having a ton of bootable images ready to go on a single drive. I mostly use it to boot disk wiping software, disk imaging software, and malware removal tools but it also serves as my main flash drive with common software and scripts I use a lot.