its crippled in firmware, hitachi and the other vendors got mad that people bought the ipods at a cheaper price than a comercial MD and ripped out the innards
the early mini's MD actually do work as a CF card, a problem that caused massive conffusion on ebay when the news went live, after the cards had been swapped over to thier crippled version.
there are 2 product numbers when ordering now, crippled and non crippled. as a side note the CE-ATA spec came out after this incident offering a smaller size and a diffrent way to connect the drives (flex cable) i am wondering if it was partially motivated by this incedent as there are already several ways to hook up a HD without inventing a new one (USB, SD, CFIO, SATA, ATA, Mapped SRAM)