In the case of Apple (AAPL), that means reading the new 45-page privacy policy that comes with the iOS 4 update and finding the section about cookies.

Actually, you don’t have to do that–iLounge already highlighted it for us:

Apple and its partners use cookies and other technologies in mobile advertising services to control the number of times you see a given ad, deliver ads that relate to your interests, and measure the effectiveness of ad campaigns. If you do not want to receive ads with this level of relevance on your mobile device, you can opt out by accessing the following link on your device: http://oo.apple.com. If you opt out, you will continue to receive the same number of mobile ads, but they may be less relevant because they will not be based on your interests. You may still see ads related to the content on a web page or in an application or based on other non-personal information. This opt-out applies only to Apple advertising services and does not affect interest-based advertising from other advertising networks.

So that’s pretty much the same tack that Google (GOOG), Yahoo (YHOO) and other big Web ad players (not Facebook, though) have taken to ad targeting and privacy: If you don’t want to see targeted ads, you don’t have to see targeted ads. But you’re still going to see ads. And figuring out how to opt out of targeting will take a little bit of doing (here are the opt-out pages for Google and Yahoo, which they describe as ad “managers”).

Note that this deals only with Apple’s homegrown ad network, not third-party outfits like Medialets or Millenial Media. Then again, Apple isn’t giving the biggest mobile ad network, Google’s AdMob, access to targeting data at all.

As others have noted, Apple’s same privacy policy doesn’t give iPhone users any choice when it comes to location data on their phones–it is tracking their location and reserves the right to share it with “partners and licensees.”

Whether or not that creeps you out likely depends on your attitude toward services like Facebook, Foursquare and Twitter: If you spend your time broadcasting your status to the world, it’s hard to get riled up about Apple keeping tabs on you, too.

But if you’re a private soul, Apple offers this promise: “This location data is collected anonymously in a form that does not personally identify you and is used by Apple and our partners and licensees to provide and improve location-based products and services.”

Feel better? Okay, how about this–Steve Jobs at D8, promising to protect users’ privacy:

We’ve always had a very different view of privacy than some of our colleagues in the Valley. We take privacy extremely seriously. That’s one of the reasons we have the curated apps store. We have rejected a lot of apps that want to take a lot of your personal data and suck it up into the cloud.

Privacy means people know what they’re signing up for. In plain English, and repeatedly, that’s what it means. Ask them. Ask them every time. Make them tell you to stop asking if they get tired of your asking them. Let them know precisely what you’re going to do with their data.

That’s a pretty straightforward, simple proposition, much more so than Apple’s confusing legalese. If Apple really wants to appease privacy worriers, the company ought to update its policy with words that sound like the ones Jobs spoke earlier this month.

But many folks — even some who own iPods and other players — are still confused over how legal digital music works. So here’s a quick-and-dirty guide to the digital music world, in question-and-answer form. We’ve included the questions we are asked most frequently, plus a few other topics.

What’s the difference between the Apple iPod and all the other portable music players? Some of them seem to have more features.

The main difference is that Apple has created an entire end-to-end digital media system around the iPod, and it works. In our view, and those of most other reviewers, the combination of the iPod’s design, the iTunes music software, and the iTunes Music Store, provides a superior experience to buying a player separately, using software from Microsoft, and buying music from an unaffiliated store.

As a result, the iPod, and the iTunes store, dominate the legal music world, with shares of more than 70% of the market, depending on how you measure it.

Still, players from companies like iRiver and Creative are attractive and have some features the iPod lacks, such as built-in FM radios. And music services from RealNetworks, Yahoo, Napster and others offer an interesting alternative to iTunes.

If I buy an iPod, must I buy music from Apple’s iTunes store? Conversely, can I buy music from Apple, and play it, if I don’t have an iPod?

No, and yes. You don’t have to buy a single song from Apple. You can fill an iPod entirely with music you convert from your own CDs, or which you get from unauthorized download services, or from friends. The latter two sources are probably illegal, but they are technically easy to use. In fact, most of the song files on most of the world’s iPods weren’t purchased from Apple, or anyone else. That’s because the iPod, and iTunes, can play back files in the open MP3 format, and in other non-copy-protected formats.

Conversely, you can set up an account with the iTunes Music Store and buy as many songs, videos, and other material as you like, without owning an iPod. You would simply play back your purchased media on Windows or Macintosh computers. You can play any one song on as many as five different computers. All you need is the free iTunes software, which can be downloaded from Apple’s Web site in either a Windows or Mac version.

Will songs purchased from iTunes play back on non-iPod portable players? Will songs purchased from competing services play back on iPods?

No, and no — unless you use a workaround (see next answer). At the insistence of the record labels, all songs from major label catalogs that are sold as online downloads must be encrypted to limit copying. There are two encryption formats. One is owned by Apple, and the other is owned by Microsoft. The iTunes Store uses the Apple encryption format, and most other legal download services use the Microsoft format.

Any player from any company can theoretically be enabled to use either format, but Apple refuses to license its encryption format to any competing maker of players. And Apple also refuses to incorporate the Microsoft format on iPods. The result is that songs bought from iTunes only work on iPods, while songs bought from most other legal services only work on non-iPod players.

There is one exception. A service called eMusic sells its songs in the open MP3 format, without encryption or copy-protection. Thus, these songs will play on iPods and all other portable music players. But eMusic doesn’t carry the catalogs of the major labels. It has a much smaller selection than iTunes does.

Is there any way around this? Can I legally modify or convert encrypted songs so they will work on portable players for which they weren’t intended?

Yes, but the method is clumsy, especially if you try to apply it to a large number of converted songs.

To convert songs purchased from iTunes to an open format that will play on, say, a Creative player, or in Windows Media Player software, you first must burn the songs to CD. Then, using iTunes or other music software, you re-import them from CD, turning them into open MP3 files that can be played on any player. This works fine, but it has two big downsides.

First, it can take a long time to convert, say, 500 songs this way. Second, the process strips off all the identifying data from the song files, and home-burned CDs typically aren’t recognized by the automatic song-recognition process used by iTunes and other software. So you’ll have to manually re-enter info like artist, album and song title.

Independent site iLounge has a free manual on getting the most from your iPod.

This process works the other way as well, with a big “if.” You can convert Microsoft-encrypted songs this same way, so they become MP3 files that can be played on an iPod. But the catch is that songs offered by the leading Microsoft-based services often can’t be burned to CDs. (See next answer.)

There is some software that claims to efficiently strip the encryption from copy-protected song files, turning them into MP3 files. But these programs are almost certainly illegal under recent copyright laws, and Apple and other companies constantly change the innards of their encryption formats to foil the programs.

What is the difference between Apple’s iTunes store, and competing services like Rhapsody and Napster 2.0? Does one carry more music?

Apple’s iTunes store claims to have more than three million songs licensed from the major labels and from independents. Rhapsody and Napster claim more than two million songs, and Yahoo Music Unlimited claims more than one million. So, iTunes has by far the most music. In addition, iTunes has a strong selection of videos, including 150 television series, plus tens of thousands of audio books and podcasts. Its competitors are much weaker in these non-music categories. Most have nothing at all besides music.

The main difference lies in how the services work. iTunes works like a physical record store: you buy songs or albums, paying separately for each. Songs are 99 cents each, albums are usually $9.99, and videos are typically $1.99. Apple is reportedly negotiating to sell full-length movies as well.

Rhapsody, Napster and Yahoo work on a subscription model: you pay a monthly fee, and can download an unlimited number of songs. For Rhapsody and Napster, the fee is $10 a month if you want only to store and play music on a computer, or $15 a month if you also want to play your music on a portable player. Yahoo charges less — $6.99 a month for a PC-only plan and $11.99 a month for a portable plan.

The upside of Apple’s approach is that, once you buy a song, you own it. It never expires. You can burn it to CD an unlimited number of times, and transfer it to an unlimited number of iPods. The downside is that, to fill an iPod with, say, 5,000 purchased songs, you’d have to spend $5,000.

With the subscription plans, you can fill a portable player for just a monthly fee. But there’s a huge downside: you don’t own the music, you merely rent it. If you stop making your monthly payments, all the songs you downloaded over the years will suddenly expire and become inert and unplayable on your computer and on your portable player. Also, rental songs usually can’t be burned to CD and can only be copied to a limited number of portable players. In order to burn the tunes to CD, you generally must first buy them for an individual price, just as you do on iTunes.

How do I use multiple iPods with one iTunes library on my PC, if I want different music on each iPod?

In the Preferences section of iTunes, you can set up each iPod so it synchronizes only with particular playlists, not your whole library. Just set up a playlist for each iPod, and set it up to sync only with that playlist.

Or, you can set up each iPod so it doesn’t automatically synchronize with iTunes at all, and simply works in manual mode. Then, you can manually drag different songs into each iPod.

Can I copy the songs on my iPod to my second or third computer?

At the insistence of the record labels, Apple was forced to cripple the iPod so it can’t copy music to a computer, out of the box. Copying only works from a computer to an iPod, not the other way. But there are many third-party utility programs, for both Windows and Mac, that allow copying from an iPod to a computer. One example is PodUtil, which has versions for both Mac and Windows. It’s at: www.kennettnet.co.uk/software/podutil.php.

One thing to bear in mind: you can only play any song you buy from iTunes on up to five computers, Windows or Mac. Songs in the open MP3 format can be played on an unlimited number of computers.

Can I share the music in my iTunes software with others?

Yes, within limits. You can set up iTunes on your Windows PC or Mac so that others on your computer network (but not over the Internet) can stream, or listen to, your songs, without actually moving the song file to their computer. The receiving computer must have iTunes installed, and both machines must be enabled for sharing in the Sharing section of the iTunes Preferences panel.

What can I do with an iPod, other than play music on it?

Current iPods can play videos, like TV shows. And most iPods can play audio books and podcasts. Recent models also can play back your photos as slide shows, accompanied by music and fancy transitions. And, with a $20 cable, the iPod can display videos and photos on a TV set.

But there’s a lot of other stuff buried in an iPod. The iPod can display, but not edit, your calendar and contacts and notes, synchronized from your computer. This works with Microsoft Outlook on Windows and with the Address Book and Calendar programs that come with every Mac. Current iPods also have a built-in stop watch and multi-city clock.

You can also use your iPod as a portable hard disk. It can be set up to appear as a regular hard disk on both Windows and Macintosh computers. Any space on the iPod that isn’t occupied by your music, videos, photos and so forth can be used to store any type of file you want, for backup, or for transfer among computers. You just have to plug your iPod into your computer, go to the iPod preferences tab, and check “Enable Disk Use.”

The iPod also has some built-in games. My favorite, Music Quiz, tests your knowledge of your own music. It plays a short clip of a randomly selected song from your collection, then displays five multiple-choice song titles. Your task is to select the right title in the shortest possible time, while a clock counts down the points you can win. It’s addictive.

There’s a ton more to know about digital music, and specifically, iPods. Apple has a series of iPod and iTunes tutorials at http://www.apple.com/support/ipod101/. The independent Web site iLounge (ilounge.com) is packed with tips and tutorials and even offers a free, downloadable 194-page book about the iPod, at: http://www.ilounge.com/index.php/news/comments/download-now-the-free-ipod-book-20.

• Email: MossbergSolution@wsj.com.