When I sold ipods on boxing day last year, i know they didnt drop the price at all but rather threw in a $20 itunes card, that was as good as it got. As far as the battery issues with the ipod, they used to be horrendous. I can't speak about the new ones (classic/nano) as I havent heard much about them recently, but understand apple does not cover the battery under there 1 year warranty.
Heres a little video about the ipod battery, I think it was recorded just before the video came out though:
http://www.ipodsdirtysecret.com/