whats this?

it saves things like app icon locations, transfering play counts, new saved photos etc.

 

and every time you connect your iPod it backs all the files up.

 

it does? mine doesn't. (not in that short time)

i presumed the syncing it does when you plug in (whether you're manually syncing or not) is as jmann4489 says, just a general status sync.

 

doesn't it says backing up your iPod?

 

it doesn't back up all the files. it just backs up small things like settings, app locations, bookmarks, calendar events, etc. this is so that if you ever have to restore your iPod, you can put the backup on your iPod when you're done so that the settings and app location and all that stay the same without you having to manually do it all over again.

 

Auto Syncing

Under Preferences > Devices, you'll see a checkbox for "Disable automatic syncing for iPhones and iPods" which will stop the auto syncing which I personally find annoying. You just have to manually sync it if you update stuff constantly.