Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Wouldnt a jailbreak lower that number as well?

Yes, because it installs more stuff onto the phone for supporting the jailbreak (including the jailbreak app store). You'd get the same reduction in capacity from putting anything else on the phone, like the apps you're going to want to use on it. In other words, I highly recommend not filling it to capacity with just music. Leave a couple of gigs for apps.
 
I listen to classical and film scores. I have 7.65GB just of John Williams and 2GB of Prokofiev, 3.85GB of Jerry Goldsmith, 1GB of Gustav Mahler. These guys all wrote a hell of a lot of music, pop musicians write 3 minute songs, these guys write 1 hour works. ;)
I have no trouble fulling 32GB... Infact I'm waiting for a 128GB phone so I can start using lossless compression...
And because these tracks can typically be any where from 1 minute to 20 minutes it doesn't make sense to count the 'number of songs'.
 
With Simplify Media and a personal computer, your iPhone can access all of your music from anywhere you have cell service.
 
jellybeans.jpg
if you can guess how many jelly beans are in here then that's how many songs will fit:p
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.