"What happens when you drag the file into iTunes or onto the iTunes icon in the Dock?"
The word iTunes appears above the iTunes icon, then disappears after I let go of the file.
"If you drag an mp3 into the iPod - it is going to be in the Music category unless you have changed the type to audiobook within iTunes."
I have done a search in the Music category; no joy. Also scrolled through the Artist, Playlist & Album lists.
When I dragged the mp3 file onto the iPod icon on the desktop, it copied across. The file appears next to folders called; Calendars, Contacts, DCIM, Notes, Recordings. When I disconnect the iPod from the mac, I can't find the mp3 file anywhere on the iPod.