That about sums it up
If you want a really decent device, stick with the 160GB iPod. If you would like a tank, find a 250MB Wolverine. It's Fugly though. (Why bother with a device that doesn't have Apple support and it's track record that you like, I assume?)
The other option would be to get a MP3/MP4 internet connected device that enables streams so you can rely on infinite amounts of home storage where you set up a music service for you to connect to as needed.
My question for you is, what the heck are you downloading that's filling it up so fast? DJ mixes? Or are you just a digital pack rat like I am? (LOL) Just don't discover FLAC or lossless files. You will be doomed(!)