I just got my 60GB refurb a week ago and i absolutely love it. The point of the 5th gen isn't to be the end all video player, but a quick option for some downtime entertainment. I have videos on my iPod but i don't really watch them too much. The thing is however, i make short films, and now having a video capable iPod allows me to tote those films around with me and not be dependent on space to carry DVDs, having players, etc. I can have them right along with my music and photos if i NEED them. For me it is pointless to buy videos of shows and music videos, i won't watch them.
Video capability is a useful touch, but not a life or death thing in the 5th gen. The primary focus of the iPod is and always will be music.