iTunes will only transfer music to an iPod. It cannot copy music back off, apart from iTunes purchases. However, the Yamipod tool Arachne pointed out mentions in its features that it can copy music to and from an iPod, although only earlier generations. E.g. it will not work on the iPhone or iPod touch from what I've heard.
Unfortunately, I don't think there is any freeware utility available that works with the latest generation of iPods such as the Shuffle, Nano, Touch, etc., at least not that I've come across or heard about.
I think Apple did this so someone visiting with an iPod can't simply connect it up to someone else's PC to share tracks. This is not the case with most other MP3 players and phones. For example, I can connect my Android based phone to my PC and copy off music as easily as I can from a USB flash stick.