iPod Newbie Q: Nano 8gb vs. 30gb/60gb w/ Video?

[Driver8]

Given a choice of two comparable units (I think the 8gb Nano and the 30gb video unit are both priced around $250), which unit would be preferable to use for X5 duty? I'm an iPod newb, so this is an area where I could use some good advice. I'm planning to go with the EAS/Dice iPod Integration w/ HD Radio kit setup in my '04 non-DSP X5. I have around 100gb of music. Will I need to convert all my MP3s to an iTunes format before I can use them on an iPod? What's the best way to manage this process...add a USB2 drive to my system to hold it all? Am I overlooking anything? Thanks in advance for any info you can offer!

D8