I have an iPod nano 7th gen and when it is plugged into the USB connector it completely locks up and i cannot browse songs or artists. Literally a black screen but it plays whatever you last selected.
On the other hand the iphone does allow you to access songs and use the device while plugged in.

Anyone else experienced these issues with any other iPods? I'm not too sure there is necessarily a solution besides just use an audio cable instead but I figured I'd let you all know about the ipod issue.