My post frequency is down, so I'm going to cheat and mine a post from an e-mail thread.
This New York Times has an article on people and their iPods, and more specifically, how people attribute a higher level of intelligence to their iPods than actually exists. For example,
The iPod "knows somehow when I am reaching the end of my reserves, when my motivation is flagging," Mr. Greist insisted. "It hits me up with 'In Da Club,' and then all of a sudden I am in da club."
People also seem to think that the iPod favors certain artists, and point to the fact that the songs by the same artist will frequently play in proximity to one another. Often this artist will be someone the person likes, so they think that the iPod has learned their music tastes.
Personally, I think this viewpoint may be a result of how humans have a hard time comprehending random.
There is a problem that math/CS majors study called the Birthday Paradox, which asks "given N people, what is the probability that 2 have the same birthday?" It only takes 23 people for the probability to reach 50%. When we did this in class it only took ~15 people before we had two of the same birthdays. (Rubin reminds me that birthdays are not actually distributed evenly throughout the year, so the probability of having two people with the same birthday is actually much higher "since people in certain weather areas always seem to get randy around the same time").
This problem has applications to the iPod shuffling problem. Assuming that you had an equal number of songs from 100 different artists, then you would need 12 songs for there to be a 50% probability of at least two songs by the same artist (100 different artists). This doesn't mean that the songs by the same artist are 12 songs apart; it just means within that span of 12 songs there are at least 2 songs by the same artist, which means on average they will be a lot closer than 12 songs apart. If there are only 50 artists, then it only takes 9 songs, and for 200 artists it takes 17 songs.
However, like the Birthday Paradox, these assumptions are unrealistic: there are definitely artists that we have a lot more songs of, and soundtracks also inflate the number of artists. We also, as the article points out, buy more music of the kind we like. Putting this all together, even if the iPod is being completely random, it should be the case that you frequently hear songs by the same artist close together, and that artist will likely be someone you like. Thus, through complete mindless randomness, the iPod has 'learned' all about your preferences.
(I didn't verify any of the math I used in this entry)