1. What's the highest capacity player that Rockbox supports? (I've been searching, and it seems like it's the 80GB iPod 5.5 Gen, but I may not have searched enough).
2. What's the battery life like on said player?
You can upgrade that 80GB iPod to be a 240GB player. There are a couple sites that will do it for you, or you can simply buy the 1.8" ZIF 40 (dual platter) and install it yourself. Its not that difficult, anything with thumbs would be able to do it.
If you do go that route you will also need this build for rockbox:
http://forums.rockbox.org/index.php?topic=20960.0 . Someone is nice enough to compile it and post it for other people to use. There is simply a change in the source to allow for rockbox to read a drive that big.
If 240GB is too much for you (or to expensive) I know that you can 120GB HDD for it as well, a long with a lot of other sizes. See the hard drive replacement section for more info.
http://www.rockbox.org/wiki/DocsIndex#Hardware_Projects2. What's the battery life like on said player?
Most people can get 10-20 hours (just playing music) on a newer "original" battery. They do make batteries with higher capacities which in return will give you a better life. I recently upgraded by iPod's battery and went from getting 6ish hours to a solid 18 hours of battery life. You can get them really cheap off eBay, or buy them for a little more (around $30) off sites like
http://ifixit.com or stores like batteries plus (there are many many others)
I got mine off of eBay, and havent had any problems with it yet.
Also, keep in mind if you do plan on doing any mods, there are tons of videos out there to show what to do if you are unsure on what to do.