I had other play with the embroidery machine today.
I found some sweet free designs on the net - the swallow from Skully on SewForum.com, and the raygun from Henry's Home Page - he's one productive chap!
I bought some felt the other day, as it is meant to be good for test stitching designs.
They turned out well, so I made a cozy for the iPod out of them:
I think Mr Touchy McTouch will feel happy in there, it is lined with silk satin - luxurious!