Hey PDX_DAve,
Thanks for the question. I understand that there is a large amount of "Other" space displayed when syncing your iPod touch. The following resource outlines this symptom and a potentail resolution:
iOS: "Not enough free space" alert when trying to sync
http://support.apple.com/kb/TS1503
Orphaned files may remain on your iOS device if it is physically disconnected while syncing music, podcasts, videos, or photos. This can prevent iTunes from syncing the iOS device on subsequent sync sessions. When this happens, the Capacity indicator in iTunes may report a large amount of "Other" disk usage for the iOS device. To resolve this issue:
1. Turn off the music or photo sync option in iTunes for the device.
2. Click Apply to sync the changes to the device.
3. Turn the music and photo sync options for the device on again.
4. Click Apply again to try to sync the device to iTunes.
If the 'Not enough free space' alert appears, continue to step 5.
5. Turn off the automatic syncing functions for the iOS device. To do this:
- Select the iOS device from the iTunes window and click the Summary tab.
- Deselect "Automatically sync when this device is connected" and select the "Sync only checked songs and videos" checkbox.
- Click Apply to sync the changes to the device.
- Reduce the amount of data that is being synced to the device and resync the device. For example, if syncing your Music library exceeds the memory capacity of the device, choose "Selected playlists" to transfer rather than "All songs and playlists" under the Music tab in iTunes.
If the 'Not enough free space' alert appears, continue to step 6.
6. Restore using iTunes.
Thanks,
Matt M.