I bought an iRiver H340 a while ago and have been running Rockbox on it ever since I got it - completely fantastic piece of software, I couldn't live without it on there. It adds so many useful features and most importantly the recording feature. Straight to WAV and not too bad battery life whilst recording, with the stock battery - about 4-5 hours maybe. Gives you level meters, you can configure the remote to flash if your input clips, it has AGC if you want it, etc.
The reason I say this is that you could get WAV recording on that 120
and if I'm not mistaken, Rockbox works on video iPod and iPod nano. Not sure whether recording works, but you could try it out!
http://www.rockbox.org/daily.shtmlanother thing I thought was worth mentioning [don't worry I don't work for either Rockbox or this eBay guy, hehe] was, I was thinking of reluctantly ordering some crazily expensive mics from America, but had about a week before my gig and wasn't sure if they'd arrive in time so just ordered some cheap £25 "Stealth Hawk Diablo" mics and preamp from eBay UK to use with my Rockboxed iRiver. Got the recording home and was quite impressed with the quality. If you don't want to spend stupid money yet on some mics but still want a decent non-distorted clear recording of gigs, seriously, try them out...
http://cgi.ebay.co.uk/Stealth-Hawk-Diablo-Stereo-Phantom-Supply-Microphone_W0QQitemZ7405444949QQcategoryZ15198QQssPageNameZWDVWQQrdZ1QQcmdZViewItem