It would appear it makes recordings of your SAPI voice, meaning you've got fixed sound files for each entry. This does seem separate from the firmware ipod thing I heard about previously to give talking menus.
Personally I always thought ipods were awfully expensive just for an MP3 player. I know this sounds odd given what I said about the stream, but I would not have paid the price an ipod is just for MP3s when there are lower cost products and other products which can perform this function while still doing something else like a phone or PDA.
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To live by honour and to honour life, these are our greatest strengths and our best hopes.