The idea for the commercial was actually suggested by Steve Jobs, the late co-founder of Apple Inc. He thought it would be a fun and unique way to promote the iPod and poke fun at Microsoft, which was a major competitor at the time.
Steve Ballmer was the CEO of Microsoft at the time and was known for his energetic and enthusiastic personality. He was chosen for the commercial because he was a well-known figure in the tech industry and his appearance would generate attention and interest in the commercial.
Yes, Steve Ballmer was aware of the contents of the commercial and had given his permission for his appearance to be used. He even joked about it during a conference, saying "I've been in a commercial, and I'm really excited about it."
The reaction was mostly positive, with many people finding the commercial to be humorous and entertaining. Some people even praised Apple for their clever marketing strategy and thought it was a bold move to feature a competitor in their commercial.
It's difficult to determine the exact impact on sales, but the commercial definitely generated a lot of buzz and attention for the iPod. It also helped to solidify Apple's image as a cool and edgy brand, which may have contributed to its success in the market.