it's locked.
Chip manufacture Portal Player in San Diego US build the embedded 8550 chip in Apple's IPod.
This is the chip that allows the playing of AAC and MP3 - However what is interesting is that the chip firmware by default also allows the playing of WMA.
It looks like for some reason this is locked by Apple. The Portal Player chip is used in other Mobile Media Players and by default allows all three formats. This is going to course some concern on the freedom of choice given to users of the Apple IPod. We're sure that at some point in the not too distant future the IPod will be cracked to allow Windows Media Audio played back on the IPod.
from Neowin