It sounds to me like he wants a hard drive he can attach to the iPod to expand its capacity. But if they have those, I don't know about them. But I don't keep up on that stuff, I've got enough music on my second gen standard iPod to keep me happy for any extended drive.
I'm not sure the serial port on the iPod is designed to output power though, so you'd probably need a power source for the external HD too. Seems like a lot of hassle for more music, are the thousands of songs you already have not enough?