I dunno.. I just got my shiney new (well, all scratched to hell after 1 day of normal usage) 5G iPod. Anyways, I noticed that there's a good 50M being used by default as reported by iTunes) with the 1.1 firmware. Heck, that's enough room for a full cd of music.
Kinda disappointed in that aspect.
The first thing I did with my iPod is replace those crummy headphones with some Sony in-the-ear-canal buds.. much better bass response.

Now I just have to get a decent case because I can't believe how susceptable the polished metal housing is to scuffs and scratches. It looks like someone took sandpaper to it, and it's only been in my pocket for a couple hours.. yeesh! Thankfully the plastic face is completely unscathed. I pity the poor sod that gets the laser engraving because it will look crummy after a couple weeks.
Overall, I love my iPod and can't see myself giving it up for anything. I drive a VW Golf, and the deck has a phono plug input, which I plug my iPod into and it sounds just a good as a CD (considering the poor acustical enviroment of an automobile).
Did I mind paying the Apple premium? Not really.. they've always built innovative products, and the iPod is no different. I couldn't, however, justify the extra price for the 10G version even though I have about 10G of MP3's on my G4 tower at home (yes, they are ALL from my own purchased CD's *grins*). The 10G ipod would've cost an extra CDN$200, strange considering the exchange rate is 1.6, not 2.0.. So I figured I'd wait until the price of the drives dropped down enough and replace it myself when the time comes.