Wolf-uk,
If you bought your chiPod as 4Gb then you can pretty much gaurantee it is hacked. I would say your s has a 1Gb chip.
Suprisingly most people take months to fill up their players and when something starts going wrong usually the warrenty is expired and they think it is just a player malfunction. That is why most of these shonky traders have good feedback.
Regarding headphones depends on how much you want to spend. Most of the name brands like Sony, Phillips etc will do a pretty good moderatly priced set of earphones. My personal favourites are here:
http://www.mympxplayer.org/in-ear-ea...ed-vt1790.html