1. you can not use your ipod with your wii ipods suck get a real media player
You can play music and videos on your wii alone with photos
2. You can download games and demos to your wii and use in with games like Pokemon Battle Revolution.
3. Target is not doing a midnight release as far as I am aware they are giving out tickets to ensure you keep your place in line though.
Target info is here
Gaming Bits - Target Wii Launch Day Details