I didn't I hope I've not wrecked my battery life

The 3 hours thing is to get it to full charge. You are advised to regularly fully deplete the battery and give it a full charge rather than constantly topping it up all the time. From memory a lot of batteries have a memory themselves so that if you're constantly letting it go from say 80% charge to 50% it will begin to think that's it's capacity. It's not quite as graphic as that and it's not a sudden thing but over time batteries stop keeping charge and have a lower capacity so regularly cycling them fully helps to prolong their health. Not doing it the first time is not going to destroy it.

mine said it was full after 1 hour so i disconnected it, but it only has a couple of hours battery life!

Well, I think it's messed up

I let it go completely flat last night, and I've just had it on charge for 4 hours and it said "charged". When I go into my songs list and use the scroll wheel, the first bar of battery has gone already and it's been switched on for less than a minute

I know that applies to Ni-Cad, but I don't think it applies to Lithium type batteries. They actually don't like to be drained completely, and should be topped up regularly, but not stored on full charge either.

I would imagine there's a Lithium battery and not Ni-Cads in an iPod.

Thats true. Ipod batteries dont need to be completely drained. Its a myth.