This is not all that exciting for me, but seems like a good idea. Obviously anyone with a mac capable of running iTunes 4 and a high speed internet connection will opt to download music at home, so this severely limits the percentage of people in the apple store that would care for this. As far as downloading onto an ipod goes, because you can't upload from your ipod onto your computer, it seems kind of silly (unless it's a lot cheaper). THe only ipod owner who might be interested is the windows user (at least for the next 7 months or so)... otherwise it just makes more sense to download at home. It seems like a nice thing just as a way for apple to demonstrate in-store how easy the music store is to use and to show those who might be hesitant around in it.
As far as practical uses - that is buying a bunch of music and burning it because you feel like it, this doesn't seem all that practical (although it doesn't sound to bad for 99 cents a song... if I was planning on buying 4 different CDs at the CD store across the street, but I know that on those CDs there are only about 15 songs that I care to listen to, $15 sounds a lot nicer to my pockets than the $50-$60 I woulda spent on the CDs). It would be cool if Apple had some CD-stomping software running off the computers too. Maybe apple should include that software in iTunes 5. I think if apple had implemented all this technology to just have kiosks, it would be a dumb idea, but since the infrastructure is like 99% there already, implementing it is virtually free. It's a win-win situation. Another thing that they could do would be to allow people to burn the actual AAC files to a CD, then go home and register their home mac (or the one that they are buying) under the account that they used - go for a shopping spree at the apple store with their high speed connection, then bring home 20 songs. I don't know... it's not something that's exciting for us computer nerds with fast internet. We all had iTunes 4 installed by monday evening and had at least experimented with the Apple store. Not everybody's as curious or technologically adept I guess. It might piss off CD store that's across the street though.