This part deals with how the Arduino talks to the iPod via serial connection. Notice how the voltage converter has been used to keep the Arduino side at 5V and the iPod side at 3.3V
Solder it up exactly as shown here. Make sure the voltage converter is not back to front and so on.
Soldering has to be neat here else whole thing will be totally unreliable. I rub the solder holes very slightly with fine emery paper wrapped around a tiny screwdriver first, to make sure the solder takes and flows easily, but that is just my own preference.
*******I SUGGEST USING AN OLDER iPOD for this project as if you make a soldering mistake you could damage your expensive new iPhone for example. I used an ex-demo iPod Touch 2nd generation********