The hidden partitions can be handled in a multitude of ways. The most advanced method would actually be a USB controller that doesn't reveal that portion of the storage to the host at all, meaning that you can never access it directly.
In the case of the iPods it's simply a second partition marked as empty. If you look at the partition layout of the device it's easy to spot, as it's not particularly hidden. So you have a whole range. I'd still strongly suggest you investigate the flash first, there's no reason to think it isn't where the firmware is kept.
