HFSExplorer lets you extract data from an HFS file system hooked up to your PC. In this case my iPod. After loading the filesystem from a device (see file menue), navigate to the folder /iPod_Control/Music and extract it to your PCs filesystem, e.g. your Desktop.
The music shows up as a lot of funny folders and files (F00, F01, ...). This is where Mp3tag comes in: One of the functions of this tool is to read the meta information from your music files and create a directory structure from them, with proper file names, folder names for the albums etc. Sweet!