It depends what you mean by "read the ipod database". Using the iTunes COM interface, you can control iTunes as well as enumerate the playlists. As for using it with the playlist info on an iPod, I am not sure. First off you would have to prevent it from auto-syncing. Then there's the case of if the iPod isn't "married" to the computer trying to read the playlist info. Hey, might work. I wouldn't advise it for a production level app, though. It's clunky for one, and using the COM interface starts a full-fledged iTunes process or attaches to an existing one (memory footprint is a tad high).
http://developer.apple.com/sdk/itunescomsdk.html