There are lots of things you don't really need but want anyway. I have the 20G color, and I have used about 60% of its capacity. I have many of my CDs in it, and will have more when I get busy converting again.
Do I need to have all that music there? No, but it beats having them in the computer, and having to reload the music that I want to listen to into a smaller memory mp3 player
Besides that I also upload digital photos in it as well when I travel. So I get more space in my camera