The code underneath is actual ARM 7TDMI RISC CPU assembly code. That's the CPU in the iPod. If someone were to actually hack the iPod as far as modifying its onboard driver, perhaps attempting to enable MP3 encoding, etc. they would very possibly need to lay a little ARM7 assembly down. Thats' where that comes from (it was not easy to find a codelist for this specific processor!). I could easily fade the code more to white (it was lighter in a previous iteration of the logo).
I'm considering simplifying it overall though. Will have to think about it. I plan to offer iPodHacks mugs / t-shirts so the logo is becoming rather important.
I am extremely pleased with the iPod image in the style of the old Mac logo.