Where is the OS stored on an iPod?

You could put a 16gb or 32gb ssd but that would cost you more than it is worth. What you want to do is get a CF card from newegg. You can get a 16gb cf card for like 60usd and 32gb for 130usd. Then from ebay or somewhere else you get an adaptor that lets you connect a cf card to your hd ipod(a HD to CF adaptor). Then once that is installed you should be able to hook the ipod to your computer and do a restore, which should reinstall the ipod firmware. I did a similar thing with my mini(except the mini does not need an adapter as it is using a microdrive, which uses the same connecter as a CF card) and it worked well for me.