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From the FAQ (.pdf):

Q. Since the iPod doubles as a FireWire hard drive, can I also start up my Mac using iPod?

A. Yes, iPod can be preloaded with system software and used to start up your Mac or to install system software on your Mac. However, Apple does not support this feature.

...And for a potentially a cool use in the future (DV, Digicams?):

Q. Can I use FireWire mode with noncomputer products?

A. Yes. First you will need to reset your iPod. When the Apple logo appears on the screen, hold down the Previous/Rewind button simultaneously until the FireWire icon appears. When you finish using iPod in this "forced" FireWire mode, disconnect and reset it again before normal operation.

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