The default Media Player is fine at playing mp3s, and it won't "jump into a movie" under normal circumstances, even if you ask to play all tracks. The Media Player maintains a library of media files and you play your music media having selected by Album, Artist, Genre etc. via a hierarchical list. Playlists are also supported.

The headphone jack is the standard 3.5mm socket.

The Media Player supports Random and Repeat play modes.

Sell your iPod? Yes, it will help finance the two 8GB SDHC cards you'll be needing to feed your N800.

The best way to transfer music is to mount the SD cards on your PC in a card reader. Alternatively you can mount the N800 as a USB mass storage device and copy the files, but this will most likely be slower than mounting the cards directly in a card reader.

"Any problems with drm?" - yes, it sucks but that's probably not what you meant. DRM isn't supported on the N800, so tracks with DRM won't work.