It was a weird win-win for Apple if I remember correctly. They were able to sell more iPods, get iTunes installed on all HP machines, and block HP from creating a rival music player. I honestly am not sure what HP got beyond the logo on the back of some iPods and the ability to try and associate themselves with a popular and cool product.

I think HP in that era was definitely trying to be more "popular and cool." Not sure how much it really helped though.

HP of the era was falling apart and making stupid acquisitions.

Would that have been pre-apple store, an effort to use HP's distribution/sales channels to get iPod into, like CompUSA or CircuitCity?