Well think about it, no iPod is the exact amount that is advertised on the box; my 1G 1GB nano was actually around 790MB, my 5.5G 30GB classic was actually around 27.7GB...taking into account for the fact that the size of updates for these iPods were just mere megabytes indicates that all this space cannot be for the software and instead it comes down to formatting.
The "Other" section on the iPod would be things stored in the preinstalled apps (as they aren't included in the green 'Apps' part of the iPod summary page); your Safari cache, your emails, your notes, stock and weather information, album art, lyrics...