iPods are NOT guaranteed quality, you'll be following hype, not good reviews. I considered one, then I actually looked around at other possibilities, and I was impressed by every single alternative.
The sound quality on an iPod is sub-par compared to most of the latest MP3 players, it has a more powerful output, but not the quality to match it, couple that with the fact that the higher output burns down the battery insanely fast, you'd be better off with a higher quality player, lower output and better quality headphones.
Something like the Zen Touch :
http://creative.com/products/product...&product=10274
Zen NX (One of which I own, and I am VERY happy with it):
http://creative.com/products/product...&product=10274
Or maybe a MuVo :
http://creative.com/products/product...&product=10659
With Creative, considering they've been in the business of MP3 players for longer than Apple, have a wider range of products and are proven BETTER by specification, you'll have more guaranteed quality with them.
Don't get an iPod, it's equivalent to just taking more money and flushing it down a toilet.
In terms of gaming, get a Gameboy Advance SP, there are no overly impressive DS games out right now compared to a wide library of GBA games, get that for now, enjoy it lots and then trade it in if and when you want a DS. Plus, you can't play old Gameboy games on a DS, only GBA games.