Just to add to Chris's answer, Talking books are generally in mono (or if not, can be converted to mono, without detriment). This provides an additional reduction in file size.
I also have to say, that I think you would be much better off with a vanilla mp3 player, rather than an iPod. A great deal of the iPod software and interface is devoted to the classification of music in to styles, moods etc., selecting random playlists and so on. None of this is of any benefit for a talking book (unless you like the chapters read in random order!).
You can buy a vanilla mp3 player or a fraction of the cost of an iPod, and it will give you much better (i.e more suitable) control over what goes where, and how it's classified and played.