I occasionally see support requests to the effect of:
“My laptop hard drive has little space left, so I’d rather not store my entire iTunes library on it. My iPod, on the other hand, has more than enough space for it. How can I set up iTunes not to delete files from the iPod when they aren’t on the laptop any more?”

It’s certainly possible to set up iTunes that way, but there’s a fundamental underlying issue. The combination of iTunes and iPod is intended for the iPod to represent the whole – or a subset of your – iTunes library. That way, you can easily and automatically sync the two. The iPod becomes a satellite of your computer, carrying songs, photos, videos, contacts and such. This falls apart completely when your computer itself doesn’t actually contain the entirety of such data, which is why, for the above scenario to work properly, you have to turn auto-sync off and copy stuff over manually.

It works. But the above is not the problem. You have to read between the lines of the above quote to get the actual crucial information: there is no backup strategy.

Take another look at the quote: some of the iPod’s data exists twice; on the computer and on the iPod. The remainder exists once; on the iPod only. At best, there’s a backup strategy for whatever is on the computer, but even then, that still leaves items on the iPod not backed up. The iPod itself doesn’t serve as a backup device. Whether hard drive-based or flash memory-based, it is far too fragile, short-lived and unreliable to serve for such a thing. It simply isn’t designed to be used that way.

With the limitations of laptop hard drives, it can indeed be tempting to leave some stuff only on your iPod. I would strongly advise against it, however. Unless you really don’t value some of your music all that much, you should have it on at least two locations, not one.