No, this isn't true.
You can use other programs to put music onto your iPod, but iTunes is the most compatible, so you should use that.
iTunes can be downloaded from Apple's website.
To add music to your iTunes library, you can put in your CDs and press the 'import CD' button. Once playable on iTunes, you can then connect your iPod, and the music will transfer to your iPod.
If you want to purchase music via a download, you can do so via the iTunes Music Store, that is part of iTunes itself. But you don't have to do this. I would recommend not doing this either; the music is only compatible with iPods. If in a few years you come to change from iPod to something else, you will have to buy your music all over again.
Amazon have just started their mp3 store in the UK. I've purchased several songs from there. Not quite as seamless as iTunes Music Store, but not far off. And best of all, the songs are in mp3 format, so will play on any device.
http://www.amazon.co.uk