There is only one way to manually manage music in iTunes, you have to set the software up to manually interact with your iPod.  Normally, iTunes will sync your media stored in your iTunes Music Library.  This means you plug in your iPod, iTunes opens on its own, it syncs the library to your iPod and then you can eject the iPod and begin to use it.  Any changes made to your Music Library are automatically updated on the iPod.  If you add music, download a new podcast or delete a video from iTunes, it will do the same to your iPod whether you wanted it to or not.

If you manually manage music in iTunes, it gives you complete control over what stays on your computer and what stays on your iPod. If you want to only keep a certain amount of music, videos or more on your hard drive, manually managing music in iTunes would give you that control. You can delete, add or change things in iTunes without worry that it would reflect on your iPod.

For example, if you manually manage music in iTunes, and you have the complete collection of The Beatles in your Music Library, you may only want a few of their albums on your iPod. If this is the case, then you can simply drag and drop what Beatles albums you want onto your iPod, listen to them on the go and when you plug your iPod back in, everything will remain as is. iTunes will not try to add all the albums back onto your iPod. If you did not engage manual management, iTunes would copy the Music Library as is onto your iPod.

It is very simple to set up your iPod to manually manage music in iTunes, simply plug in your iPod and wait for it to load.  Once loaded, click on your iPod in the device list and its primary screen will pop up.  From there, you want to select the tab next to "manually manage music and videos."  Once checked, it will take a few seconds for iTunes to record the changes and you will have turned off the automatic sync feature for your iPod.  After this, you will simply drag and drop music and other media to your iPod and delete it at will.