Shane published already yesterday his Top 5 Father's Day Gift Tips. He should know best as he is a father. Apple also put together a nice Father's Day Gift Guide on their store focusing on the iPod.
Besides free engraving, Apple offers from now until Father's Day (Sunday, June 21st) free signuature gift wrapping.
Apple iPods start at $79 wiht the new iPod shuffle. Of course if your Dad is cool he already owns an iPod then you can find him an iPod accessory on the Apple store.
More details on the Apple Store Father's Day page.