Since Apple left the door open, XtremeMac has jumped at the opportunity and created MicroMemo audio recorders for iPod (which I reviewed in October 2006) and iPod nano. The MicroMemo nano (US$60) is available in either black or silver and snaps firmly onto the bottom of the nano via the dock connector and headphone jack.
From there you simply click the record button to begin capturing audio - there's no software to install, it's recognized by the iPod immediately. Captured audio is stored (in WAV format) in the "Voice Memos" playlist which is then synced to your computer via iTunes. From there you can listen to, export and edit the captured audio to your heart's content.
A small speaker on the front of MicroMemo allows you to listen to your audio directly - although it can be difficult to hear in noisy surroundings where headphones are a better choice. If the built-in mic isn't enough, you can detach it and connect any standard condenser mic with a 3.5mm jack.
Two quality settings are available Low (8-bit, 22 kHz) and High (16-bit, 44.1 kHz). Low records at a rate of 2.6MB per minute, High at 10.3MB per minute. Low is acceptable for most spoken word recordings without a lot of background noise, but I'd recommend using high for noisier situations and for anything musical. If you're looking for a sleek recorder for the iPod, the MicroMemo is worth investigating.