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OK, in order:
1 the iPod stores music in folders under artist name, then under album name. You set these all up in the free iTunes application. It's the mp3 tags that sort the folder accordingly. By default, this is automatically done by iTunes, but you can opt for this not to happen (though I don't know why you would do this). You can also setup playlists within iTunes, of selected tracks/albums and so on. When you dock the iPod to your computer, iTunes automatically by default (although again you can turn this off) transfers tracks/albums/artists/ playlists to the iPod
2 yes, the iPod allows you to locate music from these mp3 tags, by artist, album, trackname, or playlist, quite simply with the clickwheel control. You can also select tracks/albums/artists to put into a playlist on-the-go (ie, as you use the iPod, without your computer)
3 several ways: (a) you can turn off the automatic syncing from your iTunes library, so that you only update the music you want manually (b) use automatic syncing only with playlists (c) take music you don't want on the iPod out of the iTunes library. There are other third-party solutions too, like utilities to allow several iTunes libraries to co-exist.
There are larger iPod variants though - the iPod photo is available in 30Gb and 60Gb forms.
4 I have the CarDock FM, which is an integrated cradle/FM transmitter/iPod charger and I can thoroughly recommend it. Yes, however, FM transmitters are illegal to use in the UK, so I only use it when I'm out of the country, of course...
Also, it's worth bearing in mind, that an increasing range of cars these days are factory-equipped with in-built iPod connections, and you can now buy several head-units or head-unit adapters with iPod connections.
Hope this helps.
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