My main iPod is an 80GB iPod video. My music and movie/TV show library keeps it a little less than half full. As you can imagine, though, not much of that library resides on my iPhone right now.
I got the iPhone with the most capacity available: 8GB. But even with that storage space, I got less than 20% of my iTunes library onto the phone and I’d like to get more.
I created a special playlist for my iPhone that is synced only to the phone. With it, I picked about 6GB of my favorite music. I wanted to leave the rest of my storage space free for contacts, calendars, bookmarks, email, and photos. It’s working so far — I’ve got around 2 GB free on the phone so far. You can even use smart playlists to optimize your iPhone storage capacity.
But I don’t like the idea of having to pare my music library down from 6,700 songs to about 2,000. I don’t like having to exclude my movies and TV shows completely. The iPhone commercials keep showing me Pirates of the Caribbean playing on the device. I’d like to be able to do something similar (with another movie, though, thanks), but if I put a movie or two on my phone, I’m going to be out of space.
There’s not a lot to do about this right now besides making tradeoffs and syncing some items on one day and other items on another.
I really look forward to future versions of the iPhone that pack more storage space into the fancy little case.

