I just used the v3.9 beta to download 700+ songs to my iPhone. (Yes I stood in line on Friday). It took about 15 minutes to do the whole thing and was very easy.
The songs sound great and the images are much clearer and larger on the iPhone than on my iPod.
Photo images are displayed as 2.00" x 1.25" on the iPhone. Photo images are displayed as .62" x .37" on the iPod.
This may not seem like much, but the iPhone images are 10 times larger!!!!
If you are thinking about getting an iPod, I would HIGHLY recommend getting the iPhone instead -- it is a phone, iPod and web browser in one.
In the new version 3.9 (to be released later this month), there are songs AND images that are exported to an iPod or iPhone. In the current version 3.5, just the songs are exported.

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