HPod
Let me be the first to beknight this the "HPod" ...
Note that the press release says the HPod will be "based on Apple's iPod". This does not mean a "rebranded" iPod. It means that some bits of the technology will be used by HP.
IMHO, this it the only way you'd ever see a low/mid=market Flash player with iPod compatibility.
An HP brand on the device instead of an Apple brand significantly lowers the "bar" of brand that the device must live up to. This can be good, because Apple doesn't want iPod associated with some segments of the market, but does want the market share for their file formats that those segments allow. Apple doesn't want people to see "iPod" and thing "$79 at WalMart!", but when people go to WalMart looking for a cheapo POC device, Apple doesn't want them to end up being locked out of upgrading to the iPod in the future.
IMHO, this is a "gateway" device. People buy the 128MB HPod as a first cheap entry into digital music. They buy songs on iTMS, start carrying them around with them. Then, pretty soon, they realize that 128MB is just way too little memory for their songs, and start looking bigger. What's bigger? The iPod, of course!
Contrast this with the current situation, of which Apple is very aware: people wanting to "toe-in" to digital music buy a WMA-based crap-flash player from RCA or Rio. They find out that the device is too small or just plain a pain to use and one of two things happen: they throw the thing in the garbage and give up on digital music (yes, I know RCA owners who had to be convinced to give digital music another try), or they look around for devices that work with what they have (a library of WMA songs), and buy a Creative or Archos brick. iPod is just not an option for these folks.