"Other" is the measure of used space on the iPod not taken up by Audio, Video & Photos. This includes the iPod's library and artwork plus any files you may have copied to your iPod in disk mode. The overhead for the library & artwork data is typically 1-2% of the size of the media, e.g. for 100Gb of Audio & Video expect to have around 1.5Gb of "Other". This information is needed for the iPod's operation and cannot be removed.
If you have significantly larger amounts of "Other", not related to files you've intentionally placed on the iPod, then these are probably disconnected copies of your media files or iPod libraries left over from failed sync operations. The only way to recover the space is to do a full restore.
If you have copies of all your media in your iTunes library this isn't a problem, but if you've been manually managing the content then you might need to try to recover the files from it first. See this
post by Zevoneer on transferring files from the iPod to your computer. Some of the tools rely on the iPod having a healthy library however the manual method mentioned towards the end of the post should work regardless.
How much other? How much media? How big is the device? Whether it is "too much" room depends on other factors...
tt2