If you get your iPod back without the music on it, file a claim in small claims court for the value of the music you lost. I'm not sure if that's what you meant, sorry.
I know what you mean about not knowing what she meant, but I'm pretty sure she's not complaining about anything. First and foremost, if that's the problem and the main reason for this thread, it's actually on you to back up your purchased music. After all, after you purchase music at the iTunes store, it asks you to back it up. Secondly, songs aren't purchased through your iPod anyway unless you have an iPod touch with stable internet access to download it through that, and even then, you can sync it with iTunes and transfer the songs. But that comment is only if you are complaining because you didn't still have your music on it. And even if the problem is due to the music, you still have other means of getting it back (assuming that you don't have it on your computer).
If you contact iTunes support, they'll usually be very lineint on allowing you to redownload all purchased materials that are still in the iTunes store from your account at now charge to you.
If it's broken and Apple can't fix it, unless you're still within your warrenty, it's still going to cost you some money. It's not much, though, even for something like an 80 GB iPod or something like that. It's usually refurbished, though, when you get a replacement unless you plan on buying a brand new iPod, which I... really wouldn't recommend doing unless you want a brand new one.
Anyway, yeah... if you aren't complaining at all about it and are just sharing something that happened, then cool story, bro.