Yes, music can be organised into playlists.
Podcasts, video, apps, books, playlists can all be selected on a per device basis.
We run an iPad, 4 iPhones, 2 iPod shuffles and a iPod touch. All with separate content and 1 iTunes library
I'm using Windows 7 with iTunes.
I don't think the wonders of iCal and Address Book will do him much good, MMR.
(I have made this same mistake, no worries!)
If you hold down the OPTION key while opening iTunes
Fixed that for ya!