According to the iPod User’s Guide (for the original iPod), “The iPod Remote is included with some models of iPod and can be purchased separately.”
The iPod Remote includes a “rocker”-style (side-by-side) button for volume up/down, a play/pause button, a forward button, and a back button. The iPod Remote also includes a clip (to attach the remote to clothing), and Hold slider on the side.
The iPod User’s Guide explains its use: “To use the iPod Remote, connect it to iPod’s headphones port, then connect the Apple Earphones (or another set of headphones) to the remote. Use the remote to adjust volume, play or pause a song, fast-forward and rewind, and skip to the next or previous song. Set the remote’s Hold switch to disable the remote’s buttons.”