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(A) Look for something like "USB Device" in the Music, Video, or Picture tabs. When you first connect the iPod, there should be a little popup on the top right of the screen that says USB Device connected or something.
(B) Currently, you can't play games while listening to music. You can surf the web and probably do other smaller tasks, however. I don't have any solid proof at the moment, but I've read on numerous forums that Sony hinted at releasing a patch to allow for this in the near future.
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PSN ID :: Triple6ix
Games :: Rainbow Six Vegas, Uncharted, GTA4
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