The human body is acting as an antenna here. This trick is used with radio pagers where the antenna in the pager is designed to couple to the human body which in turn radiates more efficiently than the pager antenna alone. The same trick cannot normally be used with cellphones, etc., because these work at a different frequency. For most cellphone situations, the human body decreases the efficieny of the radiation. For the FM frequencies of your iPod it works as an antenna.
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