My three kids have ipods, they are 5, 7 and 8. My 7 year old got one for xmas first (she would sit and listen to my moms for hours, so my mom got her one). Then we bought my 8 year old one too, she kept stealing the other one.
Then we had a coast to coast summer road trip last summer, my 5 year old lucked out, we bought her an ipod, and a DS both refurbished. Really we bought it because we knew we were going to be gone 7 weeks,and we didn't want to hear the crying because she had neither an ipod or a DS.
All three kids use them a lot, surprisingly. They almost always bring them in the car. Plus, we travel a lot, so it is so worth it for them to have them. They listen to them in bed sometimes too.