I just found this link on Digg's back page, while it doesn't say anything directly about becoming part of the iPod, it sure as hell leads to some interesting speculation.
http://www.embedded.com/showArticle...IZPBBUQSNDBECKH0CJUMEKJVN?articleID=175800545
SAN FRANCISCO Claiming an industry first, low-power codec IC startup Mobilygen Inc. said Thursday (Dec. 29) that its MG1264 chip supports real-time, high-quality H.264/ACC video capture compatible with Apple Computer's video iPod.
http://www.embedded.com/showArticle...IZPBBUQSNDBECKH0CJUMEKJVN?articleID=175800545