you can get somewhat bigger cells in there, but you will be limited based on LiPoly technology- IE its effectively a linear relationship of cell size to capacity. (Removing the "crappy budget battery" vs the quality name brand battery comparison) So you will only get an percentage increase roughly equal to the precentage increase in cell size. It won't be much. The biggest gain would be if McNair used cheap-a$$ chinese LiPoly's that won't hold a long charge and have a lower than average current capacity. I;ve been seeing that with alot of the 18650 that have flooded the market. listed as "2800mah" but after several proper charge cycles, they settle lower (down as far as 2000-2100) The sanyo's and other japanese high quality control ones hold very close or even above rating. Its all about quality

The topology inside the unit is to take 7.4V and step it down to all the parts inside, as jackbox said earlier. You would have to do a step-up (boost converter design) from 5V to charge. 7.4V & 1600mAh = 3.7V @ 3200mAh = 11.84 Watt-hours = 5V @ 2,368 mAH USB for charging will max out around 1800 mAh and for usage aka power your ipod if the battery is dead, roughly 1500mAh.Their design is just too power hungry for quick battery charging, and powering the device etc. Design compromises... usual thing.And for fun math, 12v would be 986 mAh (just under 1Amp)Could you design it to charge from USB. sure, but you would be limited to the current draw. So even if they went to 3.7, but kept to cells in parallel (bad idea, better to go with one larger sized cell) now you are at 3000 -3500 maH on the cell.. that equates to 11-13 Watt-hours of power.The draw to charge quickly on the 5V usb would be , 2200 -2600 Wh. So now you have to limit your charge capacity, leave some margin, tell the usb port you are requesting 1500 mA max, so you now charge at 1/2C to 2/3C aka if the battery takes 1 hour to charge, now its taking up to 2 hours to charge, people generally dislike to wait for their device to charge. And the longer it takes , well it gives a negative impression overall. Anyways, enough of the dirty EE talk
