Current iPods will top out at 480mbps, the speed of USB 2.0. This is only the max speed in bursts, it is not a sustained rate like firewire.
The iPod Touch and iPhone have the highest pixel density of any Apple LCD ever shipped. They have 480x320 pixels and you cannot create any more than that I'm afraid. I suspect it will be a while before we see an iPod with an HD screen.