The latest iPod firmware update introduces a volume limiter which, as far as I can tell, you can’t disable from the menus or from iTunes. It’s to protect your hearing, but after 15-odd years of playing in a rock band my ears are knackered anyway and a capped iPod is far too quiet (especially if you’re listening to “nice” music, or prefer it when heavy metal makes your ears bleed).
Incidentally, this kind of stuff – “upgrades” that take away functionality – really bugs me. But I’ve ranted about that before, so I won’t rant about it again now.
Aaaaanyway. If you want to disable the cap, GoPod does it with a single click.