GNU/Linux is a very stable and secure operating system. You won't need an antivirus or anything like that. Unlike Windows, Linux is capable of true multitasking and gives you complete control (You'll see what I mean if you use it). You probably will have to give up some of your favorite Windows software, though. But you can almost always find an open-source alternative:
http://www.linuxalt.com/
Linux has an instant messenger called "Pidgin." Pidgin is compatible with msn messenger, yahoo, aim, myspaceim, etc so you should have no problem with instant messaging.
There is no iTunes for Linux, but there are alternatives (that I happen to like better) like Amarok and Rhythmbox.
Yes, there is Java
There is open-office, which is compatible with MSOffice documents so microsoft word documents won't be a problem. And yes, you will be able to use them at school. Just make sure that when you save a document in OpenOffice, you choose "Save As>Microsoft Word Document"
There is VLC media player for Linux, which plays just about everything including DVD's.
And yes, there is firefox
Most of the software I mentioned above will be preinstalled.
This is version of Linux I recommend for you:
http://www.linuxmint.com
You might want to read the user guide, it's pretty helpful:
http://ftp.heanet.ie/pub/linuxmint.com/stable/5/user-guide/EN-v1.pdf
Linux Mint comes with everything you need to do the things you mentioned right out of the box.
Also, there is a program called "Wine" that allows you to run about 70% of Windows programs/games under Linux. But I strongly suggest you try the open-source alternatives before using Wine. In many cases, they're better.
If you want to know if a Windows program you absolutely can't live without runs in Wine, check the application database:
http://appdb.winehq.org/
Good Luck, and I hope you enjoy Linux as much as I do
Edit:
Update your iPod with it? eh you can, but it's a little tricky:
http://armin.emx.at/ipod/update_howto.html
Microphone/webcam: Um I'm not sure if Pidgin supports that. But there is a clone of msn messenger called amsn that supports webcams/mic:
http://www.amsn-project.net/
It is also possible to run both Linux and Windows on the same computer. It's called a "Dual-Boot." Here's a guide I wrote on dual-booting:
http://www.linuxmint.com/forum/viewtopic.php?f=42&t=13991