Do you have any reason to believe they'll stop recommending your application after the name change?
Just make a big landing page 'iPodRip is now known as iRip'. That way you can keep all of the search engine juice you accumulated with the former name.
Pidgin (formerly gaim) survived a very similar situation to yours and the Pidgin homepage is still the top google result for 'gaim'.
You're right, they probably will continue to recommend it.
The issue is the lawyers. They don't want us to have the domain at all, which is clearly where most of the value lies.
And as Jobs doesn't care either way... there just seems to be a large disconnect between the decision makers at Apple (who don't care at all) and the law firm that represents them (the law firm is the 2nd largest in the world, with 2 billion in annual revenue).
Have you asked if they'll give you a grace period during which you can redirect people to a new domain, and/or allow you to bid on search keywords for 'ipodrip', so as not to destroy the goodwill built up by you product? If not, perhaps you should lawyer up and negotiate an orderly transfer. an IP lawyer might propose to Apple that they buy the offending domain off you, or that if you transfer ownership they will maintain a redirect to your website for a set period of time.
You are entitled to negotiate, since the letter you received from from Apple's lawyers, not from court whose decisions are final or limited to a narrow kind of appeal. IANAL, but this is basic common sense. In any case, you should be taking to an attorney to ensure that whatever action you do take protects you from future claims of liability.
What makes you think he doesn't care either way? It seems pretty clear that he doesn't care about the costs you'll incur by changing your name, but I don't see any reason to think he doesn't care about you infringing on his company's trademark.
I would view this as a technical challenge to survive a domain name change because as you pointed out, the trademark aspect is pretty clear cut and Jobs isn't going to intercede.
Talk to some SEO gurus because I'm certain there's a best practice for doing something like this.
To go back to the Pidgin/Gaim example, it doesn't appear that they own any gaim related domain beside a way out of date sourceforge one and they still own all of the top spots for 'gaim'.
edit: another idea, post an "ask HN" about it, I'd be curious to see what this crowd would come up with.
My suggestion would be to make the post generic so that the answers can benefit others, in addition to yourself, but this could be apparent (and I'm stating the obvious like an idiot).
Try contacting your own trademark/domain name lawyers. There may actually be a way to keep the domain name. You should not believe everything lawyers that are adverse to you say.
Just make a big landing page 'iPodRip is now known as iRip'. That way you can keep all of the search engine juice you accumulated with the former name.
Pidgin (formerly gaim) survived a very similar situation to yours and the Pidgin homepage is still the top google result for 'gaim'.