iTunes will remove some of the "Other" for you as needed. I was copying over a playlist that was a little bit bigger than my remaining space on my iPhone, by maybe 20 megs or so. Once I realized this, I thought iTunes would complain, but it didn't. I watched the capacity meter as stuff copied over, and once my iPhone reached capacity, the space being used by "Other" began decreasing and the space being used by "Music" began to increase until everything was copied over. I can only assume that "Other" are things like your Safari cache and temp files that iTunes will clean up when space is needed for more important things.