Step 1: Download YouTube to iPod software. Install and launch it.
Step 2: Download YouTube Videos and save YouTube flv to your personal computer:

Step 3: Convert YouTube flv videos to iPod compatible video:
Click
to input YouTube video file to be convertered (batch convertsion supported, you can add as many YouTube files as you want).
Profiles option, you can choose what kind of video/audio formats you want to convert YouTube to:
iPod MPEG-4 Movie (.mp4) -- Default for iPod
iPod H.264 Movie (.mp4)
iPod touch H.264 Movie(.mp4)
iPod touch MPEG-4 Movie(.mp4)
iPod TV Size1 (480x368) MPEG-4 Movie (.mp4)
iPod TV Size2 (512x384) MPEG-4 Movie (.mp4)
iPod TV Size3 (640x480) MPEG-4 Movie (.mp4)
iPod video nano H.264 Movie (.mp4)
iPod video nano MPEG-4 Movie(.mp4)

Besides convert YouTube to ipod, it also supports iPhone, apple TV, and other mp4 players:
Apple TV (1280x720) H.264 Movie(.mp4)
Apple TV (640x480) MPEG-4 Movie(.mp4)
iPhone (480x320) H.264 Movie(.mp4)
iPhone (480x320) MPEG-4 Movie(.mp4)
MP4 - MPEG-4 Video (.mp4)
PSP - PSP MPEG-4 Movie (.mp4)
Zune Video - MPEG-4 (.mp4)
Then click the folder button, select the destination folder where you want the converted Ipod video files to be stored.

Click
button to start converting YouTube to iPod.
Step 4: Just use iTunes to transfer all converted videos to your iPod, and enjoy it any where.
Run iTunes first, Click "Add File to Library..." to add converted files to iTunes library, then directly drag files from Library on to your iPod.

Ok! we have finished the whole process to convert YouTube to ipod now.