How do I install it? Do I need a Windows server (I'd probably use a virtual machine)? Would I install the normal client version on it and just have it run as normal or is there a server/service mode?
How would I access it from my windows/PC desktop? Does MM have a "client" mode, or is there a web interface that I've missed?
I presume my Android could sync over Wifi, but how would I sync my iPod?
I feel that I'm missing something here...
Service is installed from the MM options if I remember correctly at Options > Media sharing. Yes you need to install on Windows (it installs as a windows service). So yes you install normal client version, go into MM options, and install service.
Access it from your desktop by installing another instance of MM and accessing it through the Media server node. Though for your purposes it sounds like you have 1 desktop, no need to run a virtual machine just to run the service. Just install the service on the PC. When you open MM it can run alongside the service.
Android can sync over Wifi but iPod requires a USB sync.