Is it possible to play content from my iPod while the iRecord is recording content onto my iPod?
—No, while iPod is connected to the iRecord device it is not able to retrieve content to play because its user interface is disabled. However, when you stop the recording, you may immediately play it on iPod without detaching them from iRecord. I recorded a movie/song to my iPod and files are created in Videos->Movies and Music->Songs playlists but these are not visible in iTunes local library? Also, if I sync the files are deleted from iPod. —iTunes works in one direction, i.e., iTunes-> iPod and not the other way round. Hence, you will not see these in iTunes local library. For this same reason iTunes deletes the iRecorded files on forced syncing since there is no history of them in iTunes. When using iRecord the manual mode of iTunes is enabled by iRecord to prevent automatic syncing. Ofcourse you can move your contents from iTunes to iPod in manual mode.