I've recently had discussions with a couple of colleagues that indicate the iPod's Manual Mode is less understood than I thought. I'd like to use today's entry to clear up some confusion about how Manual Mode works.
Let's being with a little background: When you first plug your iPod into your Mac, it automatically copies the music from your iTunes music library to the iPod. By default, it's configured to update its contents whenever you plug it into a computer.
You can change this behavior, however. To begin, select the iPod icon in iTunes' Source list. When you do, a new icon appears at the bottom-right corner of the iTunes window. Click this icon and up pops the iPod Preferences window. To keep the iPod from updating automatically, enable the Manually Manage Songs and Playlists option and click OK to dismiss the iPod Preferences window.
To place new music on an iPod set to Manual Mode you must drag tunes from your iTunes library onto the iPod icon in the Source list or into one of the iPod's playlists. You can also create new playlists on the iPod. Just select its icon in the Source list and click the Plus button at the bottom of the list. A good way to move a lot of music at once is to call up iTunes' Browser (Command-B) and drag entire genres, artists, or albums to the iPod.
The "Manually Manage" setting is stored on the iPod rather than in iTunes. This makes sense when you consider that many people who manage their iPod manually do so because they want to attach their iPod to more than one computer without fear of losing the music stored on it. (When the iPod is configured to update automatically and you connect it to a computer other than the one it was originally configured with, you see a message along the lines of: "Hey, your iPod's library is about to be replaced with the music stored on this computer. Do you want to do this?" If you respond in the affirmative, the musical contents of the iPod are given the heave-ho and replaced by the contents of the attached computer's iTunes library.) It goes without saying (but I'll say it anyway) that you should use this technique only to move music you own to the iPod.
An additional benefit of manually managing your iPod is that you can play songs on the iPod through the speakers of the attached computer. Just click on the iPod's icon in the Source list, pick a song that appears in iTunes' main window, and press play. Likewise, you can select a playlist on the iPod and press Play to play the entire playlist. Songs will stream through the iPod's data port, into the Mac, and out the Mac's speakers.