The USB port works adequately for playing back stereo music from a PC in a relatively high quality fashion.
Advantage of the laptop? More general-purpose, you can get a larger capacity (should you want more than 60GB), you aren't restricted to particular formats (i.e. use any lossless format you want, ogg, mp3, etc.), you can listen to streaming radio over the internet, etc. The audio quality will also be higher, as you can get a digital output to your preamp relatively cheaply (either USB, or a $25 soundcard). User interfaces vary, but it's probably easier to navigate/catalog/search huge collections on a PC (heck, you need a PC to use the ipod to begin with). You can also use an infrared remote control to run your PC (e.g.
http://www.streamzap.com/ - requisite disclaimer: I am involved with that company. There are many choices in that area nowadays, so you have a lot of devices to choose from).
Downsides? It's big, it's bulky, it might be in use for other purposes when you want to listen to music.
Advantage of the ipod? It's portable, so you can use it in places you definitely can't use a laptop - in the car, biking, walking, running, mowing the lawn, etc. It's also sexy, has a very well done user interface, etc.
Downsides? It's expensive, single-purpose, and easy to drop/break/lose if you're prone to such things. Audio quality is also sub-par under critical listening circumstances, but adequate for most situations.
Personally, I do both (and more, really). I have my HTPC connected to the 990 via optical as well as USB. I have other computers that connect to my whole house audio system. And I have an ipod that I use mostly in my car, but occasionally mowing my lawn and stuff like that.
If I wanted to consolidate, but still do most of the same things, the ipod could be pressed into service for most of them, whereas it wouldn't be practical to take a PC with me for anything portable.