The pulled description makes it sound like you just plug in and log in. But I would hope that it only works if the administrator of the Mac had previously created a user whose home directory is iPod-based, so a login password could be assigned.
About the issue shadowfax raises, the user whose home directory is on the iPod would not have to be the user with the huge music library. You need two user names anyway, your regular one with the home directory on the Mac, and one with the home directory on the iPod, so the iPod-based one only needs the files you want to carry around in its home directory, while your big iTunes library would be in the home directory of your regular (Mac-based) user.
But that brings up another question: Why should the iPod store only one home directory, i.e., Volumes/iPod/user/? Will it be able to store /Volumes/iPod/users/myname1, /Volumes/iPod/users/myname2, etc.?
About the issue shadowfax raises, the user whose home directory is on the iPod would not have to be the user with the huge music library. You need two user names anyway, your regular one with the home directory on the Mac, and one with the home directory on the iPod, so the iPod-based one only needs the files you want to carry around in its home directory, while your big iTunes library would be in the home directory of your regular (Mac-based) user.
But that brings up another question: Why should the iPod store only one home directory, i.e., Volumes/iPod/user/? Will it be able to store /Volumes/iPod/users/myname1, /Volumes/iPod/users/myname2, etc.?