Yep, it will play podcasts. You just can't autofill podcasts (and it only plays them in order, they're ignored in shuffle play). Just add them by dragging in iTunes. I mainly listen to podcasts on mine these days.
FM tuners and other iPod add ons won't work on shuffle, it doesn't use a standard iPod dock connection.
My condolences on living in Schaumburg.
(although make sure you check out the new Entourage restaurant, it's pretty cool)