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Michelle, we have not had any issues with our firewall and location
services, although we are not using a proxy serer (open DNS is used
though).  Have you tested without using the proxy server?
It may help to look at the common ports Apple is associated with:
http://support.apple.com/kb/TS1629

Jon,
IMHO with the 20 ipods I would certainly not use more than 1 itunes
account, however you are supposed to be using the volume voucher program
and purchasing 20 licenses for those 20 devices (which is convenient since
you get a price break of 50% when you buy 20).  
To keep the apps from installing automatically you can turn that off in
the Settings-Store automatic downloads.  Although we actually use that
feature to our advantage, so we don't have touch each device to install
the Apps.

Rob Gervais
Director of Technology
Enosburgh Town School District
Enosburg, VT 05450
65 Dickenson Avenue
802-933-7777 x243