Not just modal as in “you can’t interact with iTunes until you dismiss the dialog box” but modal as in ALL THE DOWNLOAD ACTIVITY STOPS.
So, if one of your podcasts (or an iTunes store purchase) throws a download error it can’t recover and continue without human intervention.

I bought all three seasons of The Office yesterday morning, began the download, and went on my merry way. I came back this morning expecting to pack my iPod with Steve Carrelley goodness, only to discover a dialog box warning about a network connection problem prevented downloading the first item. None of the other items had been attempted—the first error stopped the other 41 items from being downloaded. Not just my iTunes purchases, but podcasts that had been updated in the interim and been queued up for download.

So let me see. My network connection was active enough to detect that podcasts had been updated, but not active enough to recover and continue downloading. Purchasing a large and expensive pile of downloads should not require babysitting. Internets can briefly come and go, and your application should know better.

This is the sort of maddening, one-track application usability behavior displayed by apple in the mid 90s that made folks say “Well yes it’s pretty, but I need to do real work on my PC.”

</fume>