As Grinler says, its a simple matter to back up your music (if it is still in your iTunes library on your HD) onto CD's or DVD's. The files are probably already compressed (as .aac or .mp3 files) on your HD.
If you are using a Mac just go to the "burning" tab in "Preferences" and tick the "Data CD" button as your desired disk format.
Now select the songs you wish to burn in the iTunes library (all of them if you wish) and click on "burn". As long as you are running recent versions of MacOSX and Itunes it will simply prompt you for a new disk when each one fills up. With earlier versions you may have to make sure that you only select a CD's worth at a time.
Done this way, if the music was encoded into iTunes Library with "standard" .aac or .mp3 compression levels, you will probably need around 10 to 15 700MB CD's for your complete library of 2000 songs (though this depends on song length of course - just divide the size of your library by the size of your optical media for a more accurate estimate).
You can find a useful Knowledgebase item relating to this process at http://docs.info.apple.com/article.html?artnum=93033
The above assumes that you have all of your music in your iTunes Library on HD. If not, then you will need to move it back from the iPod to the Mac HD before you can back up. An excellent, free piece of software for doing this is iLinkPod
(other equivalent software is also available for Windows machines)