Yes it does, basically is the same ipod but the just made it water proof, the buttons and the on/off switch are a bit harder but they work perfectly, like if they put like glue on inside to make everything water proof, is a great product, deliver what it say.
The item is a true Apple iPOD shuffle. Waterfi purchases them and then injects them with a waterproof polymer and the applies a second coating. Go to Waterfi (ggogle search) web site for a detailed description of the process. Very cool and I actually wore it surfing a couple weeks ago without issue.