I know nothing about ipods, but I have used voice recorders while flight instructing. This has been primarily useful for students having radio problems. Recording a flight training session in a busy airspace area or terminal area allows the student to go back and listen not only to the radio traffic, but to his or her interaction with it, as a learning tool.
Be careful, however. Each training flight by it's nature includes reprimand or correction. This is proper, but one does not necessarily need to keep re-living one's reproof. For a student to review the same flight may prove more detrimental than it benefits. Also you may find that your own time spent reviewing the flight in person, is better than scouring a tape, in most cases. If your instruction workload is heavy, then taking the time to go back through tapes or recordings can be a tedious burden you just don't have the time to accomplish.
If you can make the recordings and catalog them on an external hard drive, they may prove useful records of the training you've provided. I've had two occasions, personally, when keeping accurate student records protected me legally by showing that I had done my job. Conversely, evidence is a two way street; be careful you don't retain records of instruction which could one day be used against you. Do your best, but never let the liabilty of your duties slip far from your thoughts.
