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USB2 devices will work on USB1.1 systems, however it will only be at USB1.1 speeds. Realistically, you will probably get about 1MB/sec data transfer to your Ipod, at most. That will mean that 1GB of music will take about 17-20 minutes to transfer.
You can buy USB2 PCI cards very cheaply (about $20 or less), and that should be able to get you faster transfers to your Ipod, maybe getting that up to about 10MB/sec, so 1GB will take just a couple of minutes.
Confused