Repurposing 60 GB iPod

If you are going to use it with a Mac that has FireWire and USB 2.0, and it's a 4th gen iPod (not 5th gen or 3rd gen), you can get either a FireWire docking cable or USB docking cable. However, in my experience, a 4th gen iPod works better with FireWire.

It's fine with USB, but if you need to Restore it with iTunes (erase the iPod's hard drive and initialize the iPod's software), the 4th gen iPod will ask you to connect it to a power adapter to complete the Restore process. If you are using it with FireWire, the power adapter step is not needed. Also, FireWire will generally work a bit faster than USB 2.0 for data transfers. And for PowerPC Macs, you can boot from a FireWire external drive (even if it's an iPod); you cannot boot from a USB 2.0 drive.

So I would get one of these

http://store.apple.com/us/product/M9127G/B

That's about the only thing you need to connect it. If you want to use it as an iPod, you'll also need earphones; it can be any kind as long as it has the standard stereo mini-jack connector. A Dock is not needed. It charges over FireWire, so you don't need a power adapter.

When you connect it to your Mac and run iTunes, it will ask if you want to sync it with your iTunes library. If you say yes to that, it will get reformatted for Mac (and erased) and the music you have in iTunes will get copied to it. The iPod will be shown under DEVICES (in iTunes) and every time you connect it and run iTunes, it will sync any changes to your music library. If you say no to syncing, it will be set to manual mode and iTunes will open with the iPod shown in the sidebar (under DEVICES). Since it is still formatted for Windows with all the existing content, you can use the Restore button in iTunes (first select the iPod in the sidebar) to reformat the iPod for Mac and initialize the software. You can then decide to sync it or not.

I intend to erase all the music and just use it for files.

In that case, you should Restore it in iTunes (to reformat it for Mac) and NOT sync it. In iTunes, when you select the iPod under DEVICES, you will see a check box for +Enable disk use+. Check it. Now you can use the iPod as you would any external hard drive, and you should see it on your Desktop.

I can replace the battery.

If you only intend to use it as an external hard drive, you don't need to replace the battery. The iPod will act like one of those 2.5-inch external drives that gets power from connection to the computer. Since you only need it to be ON when you connect it, the battery is not relevant. I have a 2nd gen iPod with a broken display that I use for this purpose (it's my emergency/maintenance Mac OS X boot drive), and I removed the battery completely.