If I had owned a 2G iPod I would like to have investigated this feature a bit more, but you should be able to work with your 2G iPod by using the Contacts folder instead of the Notes folder--at least I can do this on my 3G iPod, so give it a try.
Your iPod can display vcard files that you might see in the Contacts folder of your iPod with the .vcf extension. So if I (on my 3G iPod) place the file below named test.vcf in my Contacts folder, I can browse to it in Extras->Contacts just like any other contact.
At a glance, it appears to display around 4k of text like the notes. Also, at a glance, it appears that any notes you place in subfolders of Contacts all appear in the main directory listing; thus, you can organize notes to some extent if you'd like.
Here's the sample format for test.vcf that you might want to use for next time:
note:Approximately 4k of text appears to fit in this area
There's a lot of documentation out on the net about the vcard format if you'd like to learn more about it.
The next part gets you up and running with plain text files. It should be trivial to adapt to to your needs.