Try using a dedicated BitTorrent client such as Azureus instead of Morpheus since you will be able to get more help from people here if you use a client we all know and use.

Correct me if I am wrong, but my understanding is that the IPOD can play AAC (i.e. mp4 aka m4a) files as well as mp3. If I were you and I wanted to listen to what I download on my IPOD I'd convert to AAC format and not mp3. You can use a lower bitrate with AAC resulting in smaller files. Overall it's a better lossy codec than mp3.