Auctioning iPods with Music

Announced earlier this week, Music Rising is raising money to help rebuild New Orleans' music scene by auctioning off celebrity iPods.  These iPods do not just come with autographs, they also come with music.  You can imagine the kinds of questions this news raised in the Ippers' minds.

How is this possible?  Did the auction site or the non-profit obtain distribution licenses for the music contained on the auction iPods?  Do the tracks fall under the first sale doctrine (not normally applicable to digital files) because of iTunes security features that limit how many places a song can be placed?  Does the existence of the music on the iPods not matter at all because the iPod will be cleared when the auction winner sets the iPod to work with their computer?  Maybe the record labels 'donated' the songs to be placed on the iPods.  The playlists are rather small.

Looking at the iPod auction FAQs and Rules didn't answer the question.  The terms of use didn't really help either.  Do any of our readers have an idea of how the organization is allowed to auction the music with the iPods?