Are you talking about hard drive-like storage? Or using it like RAM?

Do you want to store your documents on the iPod for semi-permanent storage (i.e. until you format the drive or it fails? If so, then your talking about using it like an external hard drive.
Or
Do you want to use it to temporarily give storage to open applications. (i.e. only for it to stay until you reboot the computer) If so, then you are interested in using it for RAM.

Both are plausible, but I recommend neither. The iPod is not designed for heavy disk use, which either above most likely require. Therefore, I don't recommend it.

However, technically, you can. To use it as an external hard drive you need to:

1.) Assuming you can see it in iTunes, open iTunes and go to your options for the iPod (if you are using iTunes 7, it automatically goes to that window). Then, enable Disk Use.
2.) Done. Go to My Computer and now you have access to the data on it.

You can also use it for RAM (well actually it's used for a swap file).

Pre-Step: Perform Step 1 in the above operation.

1.) Right-click on my computer, and go to Properties.
2.) Go to the Advanced Tab, and under there is a button for adjusting the swap file (I don't know the exact name, as I'm using a Mac, so I can't look).
3.) Tell it to use the partition for the page file. Adjust it to as much or as little as you want.
4.) Don't be surprised if it's slow. RAM is extremely fast compared to a hard drive.

Note: Do not disable page file on the main partition. It's necessary and can cause compatibility issues or stability issues.

By the way, this assumes you are using Microsoft Windows, not Mac OS X or Linux.

Hope this helps,
Ryan Leaf