<barf>
This has descended into utter ridiculousness.
If you don't like it: Don't buy it.
If you thought about it for a moment, and listened to what other people are saying, you'd find out that is a pretty smart move, on Apple's part:
First off: Apple is already charging for engraving. As mentioned, it costs them nothing to engrave these iPods differently from the others. They are already offering an engraving service, so this is not an exception. Why the big deal? Engraving takes place POST-assembly, there are not a bunch of iPods out there with Madonna's/Beck's/etc. name on it, it is a custom job. They only get engraved if you ask for it.
Second: The iPod is already immensly popular: this seems like a move to make it even more savvy and attractive to even more people. How many other phenomenally cool MP3 players out there offer custom engraving - with the option to have your favorite band/group/singer/athlete/etc name engraved on it? Yes, it is a collector's item, FOR COLLECTOR'S. If you are not interested in these people, then of course you wouldn't opt to get the engraving done (unless you saw some financial gain in selling one later).
For those if us who think its pretty cool: I wish they had more bands; well, particularly ones that I would *want* engraved on my iPod. However, I won't be rushing to replace my 20GB just because there is another one with someone's name on it. However, if this option is continued to be offered, and they come out with a drastically different iPod worth upgrading to, I might be tempted to get one with a Radiohead insignia engraved on the back. However, at present, that doesn't seem like a future option. (Aside: There are many places locally that can offer the same service Apple offers - In Canada, they do not offer the engraving AT ALL, so I checked around, and the exact same service can be done for a lot cheaper. They can also take custom designs and engrave those.)