Click "manage manually" in iTunes to drag and drop files directly into your iPhone/iPod. All music in iTunes is DRM free. iPods are not limited to music from iTunes, you can add DRM-free files from most other sources.
There are dozens of free tools available to rip music back off our iPod/iPhone. It sounds like your "friends" are doing something silly...
50 million iPod Touch and iPhones sold in 26 months. It's not just the homos doing the shopping, baby.
Many, including me, would dispute your claim. I've yet to use a touchscreen device with the same fluidity and accuracy. Blackberry's are clunky, Nokia's latest are plasticy and slow. None offer the enormous range of free and cheap apps.
So jailbreak it. Or buy something else. Apple has a reputation for intuitive interfaces and reliable hardware. That reputation is maintained by guarding their software architecture, and by controlling parts of what third party providers can do. If you don't like it, jailbreak the phone and don't complain if it fucks up. Easy.
A better analogy would be if you bought a Honda that ran on hi-octane gasoline, but you chose to run it with regular gasoline. Sure it'll still run, but if it breaks down Honda might not honor your warranty.