The click wheel didn't exist in 2001. And the screen was not particularly large, either (the Neo Jukebox, for instance, if I remember correctly, had a similar sized screen). The iPod Mini introduced the Click Wheel, and debuted on the iPod proper on the 4g (both in 2004). And the connectors were horrible early on: all firewire. Windows was supported through MusicMatch (eww) on the 2g and 3g, and it was after the 3g release that iTunes came to windows.

And it was when iTunes came to Windows that the iPod took off in sales (ironically, reversing a LONG trend by Jobs to keep Apple products on the Apple platform). In 2002 and 2003 they sold less than a million units. The first quarter they had iTunes on windows, they moved over 2 million units--more than double what they'd sold the previous holiday quarter.

People look at the iPod as this huge instant hit. It wasn't even 'till Q4 2004 that Apple sold more than 1m units in a quarter. And sales in 2005 came in a large part from selling through Wal-Mart, too.