Did you notice Notes folder on your iPod?
No, you cannot take notes on your iPod, it doesn't have an input
device, doesn't it?!
What you can do, is save some files in the Notes
directory while connected to a computer and later on browse those files
like an e-book. American Constitution, Bible or Basic Party Information is already available. But you can always make your own. Read everything about it at podSites. Or play a game or two from iStories.
So, that's not cool enough for you? You would like to run Linux on your iPod, you say? Go read the Wikipod and get serious.