"other" memory capacity is huge in iTunes

More than a few hundred MB of "Other" indicates an interrupted or corrupted sync. A restore will fix it. Here are the instructions: http://support.apple.com/kb/HT1414

The backup you make before you restore includes information such as mail settings, text messages, notes, call history, contact favorites, sound settings, widget settings, certain network settings, and other preferences including settings and data from third-party applications purchased from the App Store will be restored from the backup. You music, videos, and applications will be reloaded by iTunes. The only thing you will lose is some time while this takes place.

iTunes is not reading the contents of the iPhone correctly. Without changing anything, sync the iPhone. This should prompt iTunes to read the content and update the memory information.

If it does not update, then perform a restore.

Additionally, I have yet to see any comments that the "other" content has any effect on the actual operation of the iPhone. On my original, once "other" got to over 4Gb b4 I restored. I couldn't tell the difference b4 or after. Just my 2 cents worth.

That's because it doesn't, most of the time. However, most people like to know exactly how much free space they have so they know if they can add that next movie, or that next TV show, etc. Having a corrupted 'Other' reading can keep you from doing that with accuracy.

I have many email accounts I check on my iphone and they occaisionally have attachements of large sizes. Could these attachments account for the "Other" space I have that is taking up 1.35 GB on an 8 GB 3G iPhone?

Thanks!