is there a portable speaker that is compatible with the iPod Shuffle?

Hi there! As far as a basic compatible portable speaker, pretty much anything with a line-in input will do the trick. What you'll need to do is run a 3.5mm (also known as a 1/8" connector or a minijack connector) male-to-male stereo cable from the iPod to the speaker; essentially, the cable looks like a headphone plug on both ends, and is conveniently available from your local Apple Store or other electronics shop.

When you first connect the two devices together, it's likely to be fairly quiet; you may have to adjust the volume of both the speaker and the iPod to get it to a reasonable level. Just be careful when going back to headphones, though: if you've cranked the volume on the iPod, you could really blast your ears when you go back to listening with headphones. The safest bet would probably be to keep your iPod at the volume level most comfortable for headphone listening, then adjust the volume on the speaker itself. I don't know; some people may say that's not technically the best way to do it, but I think it's the best way to prevent a shockingly loud volume rattling your skull if you forgot to turn down your iPod before using it with headphones again.

Unfortunately, I've yet to see a speaker that offers charging and/or a line level output (i.e. having to adjust volume only on the speaker) for the iPod shuffle. Downside is, when you're using your portable speaker, you can't charge your iPod at the same time; luckily, the battery is pretty good on the shuffle.