I haven't used my iPod for backup tracks, but I can see where it would be very useful for that, especially the ease of organizing songs into playlists. I do use it constantly for other music related stuff.
There are a few good chromatic tuners for the iPod touch (2nd generation) or iPhone. The two I really like are Cleartune (under $4.00) and Peterson's iStrobosoft (under $10.00). The Peterson strobe tuner is easiest to read, and the display is stable. It's fairly basic, and doesn't have all the features of the dedicated hardware tuners, or the full computer version of Strobosoft (it's less than ten bucks, remember), but it's easy to use and works very well. Cleartune has many more features, including pitch pipe tone generator, and at least 22 temperament settings. You can easily customize it for your own temperaments. A steal at $3.99. It's almost worth buying an iPod touch just for these. I can even browse the Steel Guitar Forum on the iPod when I'm away from home and can find a Wifi hotspot.
There are also cool apps for metronomes, guitar chord finders (somebody please make one for steel guitar...), and lots of other useful stuff for dirt cheap or free. There's even a bubble level app, so you can make sure the drummer's platform is level..
As far as MP3 sound quality, iTunes can rip MP3's at a bitrate of up to 320K (Songs downloaded from the iTunes store are still at a lower bitrate). I doubt that my aging ears can hear the difference between uncompressed audio and a 320K MP3 even in a critical listening environment, let alone a backup track with an instrument playing over it. I can still hear the difference between 16-bit and 24-bit audio, but that's another thread, and not an option for the iPod anyway.
Edited to add: I should mention that these tuner apps require purchasing an external mic for the iPod touch. Apple has one for about $30 that is basically the standard iPod earbuds with a simple remote control and mic on the cord. There are other third-party solutions as well, and a few work-arounds (hacks) exist for the 1st generation iPod touch that does not have the integrated mic / earphone jack. I can't say whether they would work with either of the aforementioned tuners.