I have just been caught out with my second fake ipod on ebay. I broke all my own rules about buying but here are a few hints to stop anyone else being conned. (Thankfully I got my money back but had to fight through a Paypal dispute for the last one)

Beware if...
If the picture is a stock shot and not the actual item
Check that the spec is one actually produced by Apple. I bought a 1gb Nano which Apple only make as a 4gb or 8gb (Yes, I know dah!)
Check the other items they are selling- have they got more than 1 ipod?-where would they have got them from?
If you do buy one you will know immediately it's a fake because Itunes wont recognize it.
The 2 I had also had a hidden file killvbs.vbs on them which I think may be a virus.
If it has Chinese writing on the menu or any Chinese pop songs on it

All of these things seem so obvious to me now but unless you are an Ipod expert to start with it may not be to you