Two years ago this month, Apple Computer released a small, sleek-looking device it called the iPod. A digital music player, it weighed just 6.5 ounces and held about 1,000 songs. There were small MP3 players around at the time, and there were players that could hold a lot of music. Before you even get to the surface of the iPod, you encounter what could be called its aura. The commercial version of an aura is a brand, and while Apple may be a niche player in the computer market, the fanatical brand loyalty of its customers is legendary. A journalist, Leander Kahney, has even written a book about it, ''The Cult of Mac,'' to be published in the spring. As he points out, that base has supported the company with a faith in its will to innovate -- even during stretches when it hasn't. Apple is also a giant in the world of industrial design.

The candy-colored look of the iMac has been so widely copied that it's now a visual cliché. But the iPod is making an even bigger impression. Bruce Claxton, who is the current president of the Industrial Designers Society of America and a senior designer at Motorola, calls the device emblematic of a shift toward products that are ''an antidote to the hyper lifestyle,'' which might be symbolized by hand-held devices that bristle with buttons and controls that seem to promise a million functions if you only had time to figure them all out. ''People are seeking out products that are not just simple to use but a joy to use.'' Moby, the recording artist, has been a high-profile iPod booster since the product's debut. ''The kind of insidious revolutionary quality of the iPod,'' he says, ''is that it's so elegant and logical, it becomes part of your life so quickly that you can't remember what it was like beforehand.'' Tuesday nights, Andrew Andrew's iParty happens at a club called APT on the spooky, far western end of 13th Street. They show up at about 10 in matching sweat jackets and sneakers, matching eyeglasses, matching haircuts. They connect their matching iPods to a modest Gemini mixer that they've fitted with a white front panel to make it look more iPodish. The iPods sit on either side of the mixer, on their backs, so they look like tiny turntables. Andrew Andrew changes into matching lab coats and ties. They hand out long song lists to patrons, who take a number and, when called, are invited up to program a seven-minute set.

At around midnight, the actor Elijah Wood (Frodo) has turned up and is permitted to plug his own iPod into Andrew Andrew's system. His set includes a Squarepusher song. Between songs at APT, each Andrew analyzed the iPod. In talking about how hard it was, at first, to believe that so much music could be stuffed into such a tiny object, they came back to the scroll wheel as the key to the product's initial seductiveness. ''It really bridged the gap,'' Andrew observed, ''between fantasy and reality.''  But if the crucial equation is ''largest number of songs'' divided by ''smallest physical space,'' the iPod seemed untouchable. And yet the initial reaction was mixed: the thing cost $400, so much more than existing digital players that it prompted one online skeptic to suggest that the name might be an acronym for ''Idiots Price Our Devices.'' This line of complaint called to mind the Newton, Apple's pen-based personal organizer that was ahead of its time but carried a bloated price tag to its doom.

"It kinda soothes me, relaxes me, calms me down," says Danser, putting her iPod back on, sitting on the leg extension station, about to do her third rep, with the Jack Johnson song and the memory of her friend Casey in the background. Since then, however, about 1.4 million iPods have been sold. (It has been updated twice and now comes in three versions, all of which improved on the original's songs-per-space ratio, and are priced at $300, $400 and $500, the most expensive holding 10,000 songs.) For the months of July and August, the iPod claimed the No. 1 spot in the MP3 player market both in terms of unit share (31 percent) and revenue share (56 percent), by Apple's reckoning. It is now Apple's highest-volume product. ''It's something that's as big a brand to Apple as the Mac,'' is how Philip Schiller, Apple's senior vice president of worldwide product marketing, puts it. ''And that's a pretty big deal.'' Of course, as anyone who knows the basic outline of Apple's history is aware, there is no guarantee that today's innovation leader will not be copycatted and undersold into tomorrow's niche player.

Apple's recent and highly publicized move to make the iPod and its related software, iTunes, available to users of Windows-based computers is widely seen as a sign that the company is trying to avoid that fate this time around. But it may happen anyway. The history of innovation is the history of innovation being imitated, iterated and often overtaken. Whether the iPod achieves truly mass scale -- like, say, the cassette-tape Walkman, which sold an astonishing 186 million units in its first 20 years of existence -- it certainly qualifies as a hit and as a genuine breakthrough. It has popped up on ''Saturday Night Live,'' in a 50 Cent video, on Oprah Winfrey's list of her ''favorite things,'' and in recurring ''what's on your iPod'' gimmicks in several magazines.

It is, in short, an icon. A handful of familiar clichés have made the rounds to explain this -- it's about ease of use, it's about Apple's great sense of design. But what does that really mean? ''Most people make the mistake of thinking design is what it looks like,'' says Steve Jobs, Apple's C.E.O. ''People think it's this veneer -- that the designers are handed this box and told, 'Make it look good!' That's not what we think design is. It's not just what it looks like and feels like. Design is how it works.''