I love this post from Winer about iTunes and the iPod - he's off criticizing its usability:
The user interface on iTunes is awful. It's the worst piece of crap I've ever used. People would tell me when I was a Windows user that it was because the Windows version of iTunes is crap but the Mac version is easy. Well, both programs are head-up-butt impossible to figure out. The user model makes no sense. When is something on the iPod? How many copies of the music do I have? Where the fcuk are they? How do you delete something? Is it really gone? Why does it wipe out the contents of the iPod when I don't say it's okay to?
I have no idea how he managed to get an iPod to delete files - I've hooked it up to systems that don't have my library, and it prompts about synching - all I can figure is that he went and hit the wrong option in a dialog box without paying attention. And hard to use? Please. I asked my Dad about that - he's a former teacher, not a developer. His comment was unprintable, but more or less, he questioned the sanity and intelligence of anyone who finds the iTunes software hard to use.
Now, having said that, Rex Hammock makes some good points on how (and why) you should back up - and Apple should let you re-download stuff you've bought.