Yes, it operates just fine when I'm playing any audio. When I plug the USB into the keyboard, a window pops up on the screen saying that there isn't enough power to run the iPod. That didn't happen before I replaced the battery. Then I plugged the USB cable directly into the Mac Pro tower. Usually, it would either open iTunes and mount or just mount if iTunes is already opened. This time it just wouldn't mount at all. The iPod screen showed the red circle with the line through it and said, "Do not disconnect," even though it wasn't mounted. I went ahead and disconnected it any way. Nothing happened to the iPod, by the way.
After a while, I tried it again and everything worked perfectly. I unmounted it and remounted it several times and each time it worked as expected. I guess the first attempts were just hiccups.
Regarding charging, that's a whole other matter. I don't use the computer to charge it because I tend to forget that the iPod is plugged in and invariably shut down the Mac. As we all know, doing that drains the iPod battery. I always charge it using the wall wart. Sometimes it will show the battery icon with the lightening bolt and I will leave it plugged in overnight even though the icon sometimes dissappears. When I start it the next morning, it would show that it didn't charge at all even though it is showing the battery icon with the electric plug. Other times I would plug in the charger and it would charge quite nicely. As I said, my 60GB iPod Photo now has a new battery and it is behaving a little differently than it did before.