I thought you just had a set of headphones that allowed you to listen to it. I didn't know you could hook it up to everything.
Lower end iPods are flash-memory based but they do the same sorts of things. They just don't hold as many songs. Yet.
Since Apple replaced their popular mini with the nano, I suspect they will have newer nanos on the market by the holidays with even more capacity (up to 10gigs).
I believe they will also release an 80gig full-size hard-drive based iPod by that time.
Anyway, you CAN hook your iPod up to just about anything. I have an FM transmitter attachment that allows me to play it on my car stereo. I also like "taking over" other people's stereos when I visit! Sometimes they get a little freaked out by it.
I can also plug my iPod into my home stereo and it is absolutely awesome. There is simply no more need to mess around with CDs. They have been relegated to storage as emergency backup devices.