I'm not sure which would be easier to program for RockBox/linux. But if rockbox is possible that would be great, then many different supported mp3 players could be used as file hosts. Once my ipod comes in I'm going to look into this thoroughly. I have done limited amounts of C, but I'm very experienced with Java which holds many of the same constructs. I'll keep you updated on my progress with this.
Well i got my ipod friday night, haven't had time to mess with it other then for music. Since there is already a usbhostfs for linux, I'm going to see if it could be used/ported to ipod linux. The largest trouble for me that i could see is creating the adapter between the 2 devices, ipod has its own custom connector and psp uses the b type connector.