I would think it would be easier for Apple to just substitute a recent or current gen iPod to replace it. It would be a loss overall as any recall results in but it would make more sense than bringing the old one back into production or meticulously repairing each one individually and sending them back out refurbished. They will most likely scrap the ones that are mailed in and send out suitable replacements IMHO.
I'm excited either way, I still have mine and it holds no sentimental value for me just a battery that does't hold a charge. The new ones make for a much better workout companion. Those of you who prefer this old one like it for nostalgia (and arguably the click wheel) and I understand that but saying that it is a superior device is just plain silly. Each new one has been superior, better screens, smaller form factor, better performance, increased batter life (non explosive to boot) and new features (subject to later removal i.e. video playback).
Still I can see that there may be backlash for those people who send theirs in only to receive and "upgraded" model instead of the device they originally purchased and this could pose a PR dilemma. This is a strangely interesting topic. Discuss.