Mine is set up like yours (music only), behaves slightly differently, but freezes just the same. Screen black while playing (normal), hit the home button to change something, and, as it tries to change from coverflow to list view, it freezes, ultimately quits. Last weekend, Apple replaced it under warranty with a refurb. Fine for a few days, but the refurb did it today. Frustrating.
The genius thought accelerometer and so swapped for the new one. Nope. Probably software but no clue what it might be. My music is all legal, combo of iTunes, MP3s and songs from CDs.
I too would be grateful for help.