In truth, iPod doesn't really stand for anything, it's not an acronym or anything.  There is some sort of meaning behind it though in a way, though it's a little indirect. 

The Definition of iPod

The name iPod was actually proposed by a guy named Vinnie Chieco who was brought in with a few other people to help introduce the new mp3 player to the public.  Apple didn't have an official name yet, all they had was a prototype and a good idea.  When Chieco saw the prototype, he thought of the movie 2001: A Space Odyssey, in particular, the door to the Eva Pods (you young kids probably don't have any clue what i'm talking about.. go ask your parents, and watch them have a flashback) 

The term iPod was apparently already registered by Apple as a term for Internet Kiosks, but the kiosk idea never went anywhere.  It's actually rather amusing that hardly anyone at Apple even knew about this previously registered trademark, not even Steve Jobs himself.

Athol Foden, a naming expert and president of Brighter Naming of Mountain View California was quoted to say "The name 'iPod' makes much more sense for an internet kiosk, which is a pod for a human, than a music player," and that "If you think about the product, it doesn't really fit. But it doesn't matter. It's short and sweet."

We have found this to be true over time.  Who doesn't know the name iPod? It's catchy, it's easy to remember, and it will probably be an icon imprinted into our brains for years to come.