If you follow the
Freemyipod project's
step-by-step installation guide verbatim, you should have no issues.
Almost every user I have encountered having issues with the installation has deviated from the instructions given in some small and sometimes non-obvious way (and sometimes large, and very obvious ways...).
Additionally, the same goes for the device hardware. As long as you don't deviate from the instructions given, and use the tools provided for their intended function, there is very little risk. It is certainly not free of risk - nothing is - the usual disclaimers apply of course, but to the best of my knowledge there have been no devices lost as a direct result of emCORE installation.
And yes. If for some reason you find you dislike Rockbox or feel that it isn;t meeting your expectations you can restore the device using iTunes (there is also a manual method of restoration for power users).
{Saint]