Nothing wrong with a 10-year old thread.
Some answers (I've got multiple 4G nanos, 5 and 5.5G Wolfson-based babies):
-- If you are on Windows, then XPLAY3 (not free but worth it) lets you manage your iPod just like a USB drive, using Explorer. No need to "sync", just copy, delete, etc. Piece of cake.
-- ALAC 48000 uncompressed sound great on the 5 and 5.5 G's, using an LOD and any good portable amp. They sound sensational modiftying you iPod to be an iMod and using a great portable amp. Or using a Wadia or Oknyo digital doc. ALAC 48000 is near reference quality.
-- When I buy 96000 FLACs from a HiRes service, the down-convert to 48000 ALACs is really more like a decimation, not a conversion (every other sample, well not really, but an interpolate of every other). Hot A/B switching between the original 96000 FLAC from a PC and the 48000 ALAC from the Wadia dock and I hear no difference (the DAC, amp, etc. are all constant). I use FB2K (which some people say is not the best FLAC player, but I could never hear a difference) and a silent Windows PC, top of the line USB-to-SPDIF converter, pro audio SPDIF switch, Wadia 170i, Benchmark DAC SPDIF in, Benchmark Balanced Analog Out to Balanced Beta 22 to HD800's to make this comparison, so I think the rig is up to the test. I have also gone balanced into a Stax 717 with O2's and HE60's ... still no difference.
-- Now this will be controversial: I rip all my CDs with EAC, and then take the 44.1 WAV and upsample to 96000 FLAC via SOX with aliasing on. I then decimate to 48000 ALAC as in the last step, and now I have fantastic sound with full metadata and album art. Again A/B of the 44.1 WAV against the 48000 ALAC reveals no difference, or preference to the ALAC (the magic of upsampling, or more likely placebo, but who cares).
Strongly recomment XRECODE (also not free) for the best FLAC to ALAC conversion on a PC. FB2K loses the embedded album art.
Long live 4 and 5/5.5 G!!