The Dock Connector was Apple's solution to allowing both USB connections (primarily for Windows users) and Firewire connections (primarily for Mac Users) through just one port.
The first iPod to feature the Dock Connector (The "
iPod with Dock Connector" - which most people call the third generation iPod) was also the first to support USB, although it did not support USB charging (the old iPods were very inefficient and couldn't draw enough power from USB).
At this point, Apple was still including a Firewire wall charger with the iPod, so they had a cable with both USB and Firewire on it (
http://support.apple.com/kb/TA47700?viewlocale=en_US).
This allowed users to plug the Firewire end into their wall charger and the USB end into their computer. That way, they could charge and sync through one cable (and into the dock - which was also included with all but one model of iPod at the time).
iPods made after that date started to use more efficient designs, and were able to charge from USB or Firewire - removing the need for Apple to include a wall charger or for the USB/Firewire combo cable.
As the vast majority of iPods were sold to consumers with a Windows PC (no Firewire), Firewire wasn't really necessary. The chip that was included to enable Firewire syncing was HUGE compared to the required chip for USB, so Apple started to drop Firewire syncing from the product line (the first iPod nano in 2005 didn't have Firewire sync support).
Apple continued to try and cut both size and costs and eventually dropped Firewire charging support from newer iPods and iPhones.