You don't want to do that.
If you mean to use your iPod as the backup device TimeMachine uses... why do that? Provided you even have a non-Flash iPod, you're disk should not be used as a permanent drive, being written to every hour by TimeMachine. Currently Apple is selling Iomega External 500 GB drives for $140. You can get another internal 300-500 GB drive for around $100. No reason to use an iPod, and possibly wear out its hard drive earlier than you otherwise would. Drives are SUPER cheap now. Even cheaper on eBay, though I'd recommend always buying a new one from a reputable outlet.
iPods are for media playback. That's my advice.
If you mean to use Time Machine with the CONTENT of the iPod, then there might be a misunderstanding at work. iPods, generally speaking, are a one-way transaction with exceptions. You sync TO them, you don't make a habit of copying FROM them (getting iTunes purchased tracks, clever desktop work and 3rd party software solutions notwithstanding), leastwise for use with TimeMachine. TimeMachine will backup your music directory from your computer, so if that's what you want... that's exactly what it will do.
~ CB