To everybody who thinks 120GB is TOO MUCH for music alone!
I am here to tell you that I NEED 120GB for music alone! I have a 60GB iPod with nothing but music on there and it's constantly full. I probably have another 100GB of music (especially tons of live concerts and podcasts) that I cannot fit on my iPod. I'd also like to mention that many people probably would like to use more lossless encoding of their music rather than default 128kbps AAC and that requires FAR more storage. So even without videos or photos or anything else, 120GB still may be NOT ENOUGH space for one's entire music collection. In any case, it's a step in the right direction. Apple is taking WAY to long to update the full-sized iPod and they're falling behind their competitors. The current iPod design is what 3 years old now?!?
And as people have mentioned, video takes up MUCH more space and HD video will require significantly MORE space than current generation video files for iPods. So if anything, Apple should be increasing their iPod capacity as fast as possible. I could easily see using 500GB of space on an iPod if it were available to use. At that point, I would actually try to put photos and video on it. Did I mention that the digital photos I've taken since 2001 are about 120GB themselves now?
All that being said, I think that sadly they will wait until the iPhone has been out for several months before introducing the touch screen iPod HD. So my guess is maybe September. I'm really annoyed at having to wait and wait and wait though.