Cheri,
I totally agree with Audra. Good solution! Nothing happens (no food, no sleep, no play) until the iPod is found. If everything is about blame and punishment, they will be more likely to hide the truth from you next time, too. This is especially important because you can't be certain they even took it. It could have been your husband or you who misplaced it and forgot.
Children usually lie because it is an effective way of getting out of trouble and they are trying to avoid punishment.
If your boys have had the experience that lying gets them off the hook, they will continue to do it. Make sure you are consistent with appropriate consequences every time. Don't just let it go because you don't know how to handle it. And when they do something wrong, it is so important to stay calm. (That doesn't mean let them off the hook, it means deliver quick, appropriate and meaningful consequences) but no yelling or flipping out. They will quickly learn to hide things from you.
About a month ago, my 1st grade daughter came home and told me she looked on someone else's paper during a math test. I calmly asked her if she understood the rules about taking a test. She did and she knew it was wrong. I asked her what she needed to do to make it right. She really didn't want to tell her teacher because she thought she would be mad. So we talked about how good it feels after you tell the truth (like fixing a cut - so scary to do but so much better afterwards.) I never got mad, I didn't call the teacher for her or ground her, I just was there as moral support as SHE solved her own problem.
She said she did it because she wanted to get all the answers right. We sat down and had a talk about why we send her to school and what we expect. I told her that I don't care if she gets all the answers right. I care that she learns the material and that she is honest and makes good choices in life. It is okay to get an answer wrong. You learn by making mistakes and then finding the right answer, not by knowing all the answers to begin with. (That is one of the major problems with our country's school system, but that is another story.)
If your boys are lying repetatively, it is because it is effective for them or because they have learned it is best to hide things from you. This is one thing you really want to nip in the bud because it is only going to get worse.
If it was me, I would hold a family council (maybe more than one) about honesty. Talk about it, why it is important, what happens when we are honest or dishonest. Role play situations. You and your husband need to role play adult honesty, too. (Bank or store gives you too much money, etc.) Make sure to role model in life - that is the most important. If your boys see you and your husband telling white lies ("Tell the person on the phone I am not here,") everything you tell them about honesty will be meaningless.
Good luck,
S.