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You need to install itunes yes, as thats the softare the ipod uses. You can burn a disc from itunes as MP3 files no problem i think the only issue you have is with tunes downloaded from itunes as they have a copywrite protection in them but any other music you have ripped from hard copies or downloaded from other sources will be fine. The format itunes is set to rip to automatically is AAC but you can change it to MP3 and if you already have all your tunes ripped to the desktop you can just move them into itunes.
another n00b question, if i have music downloaded from other sources will itunes let me upload them or do they have to be ripped frpm cd or bought through itunes?
yes it will let you upload any music you download, as long as its a format it plays anyway. I would suggest buying/downloading Anapod though, as iTunes is pretty shite tbqh