FYI: The Washington Post article starting to bubble its way across the internets about the RIAA arguing that personal rips of CDs you actually own are illegal is sorta old news from a few weeks ago. [Washington Post]
The Fair Use Act gives us the right to backup - ripping is a form of backup - as long as copy protection was not violated during backup. Since proper CDs ( ones that fit the CD standard, is it redbook?) cannot have copy protection, it is fine.
HOWEVER, the fair use act only allows one copy. Better destroy the iPods when the feds come a knockin'.
The RIAA does not determine what is law, but they dish out the legal documents as if they do. I wouldn't worry; it's scare tactics.