Once you find a title, click on the "Borrow" button.
Then Click on "Go to Bookshelf". Here's where it gets confusing...
To actually download the title for my iPod, I have to click "Other format(s)" and choose Adobe ePub, even though I limited my search to only ebooks with that format. You must select your format (even if it's the only option on the menu) before it will allow you to download.
A window pops up asking you to confirm your format. Once you choose confirm, you will then be able to download to your device.