The problem, even with that use case as I see it, is that with just a few episodes (at 720P-type resolutions) a few books, a magazine or two, and you could be almost full. I will be interested to see file sizes for TV shows and movies encoded specifically for this device, I expect them to be in the 500MB/hr range, if not higher or they're not going to look very good. I've never downloaded movies or TV shows from the iTunes store so I can't be sure but what has been people's experience regarding those with regard to file size?
[edit] According to the iTunes FAQ the average 2hr movie is "is about 1.5 GB." I don't like the idea of any one file eating more than 10% of my storage and having to sync or delete it to get the space back.