Well, not in every case. But if you sync your music at 128 kbps to stuff more on your iPod, it’s a good idea to do it when you don’t need to use the iPod.
Last week I got a new iPod touch, and this week a new nano. The former is 32 GB, and the latter 16 GB. I’m syncing the nano now – and only copying 12 GB of music to it – and it’s gone a bit more than 1/3 of the way in about 5 hours. (I’m doing this on a Mac mini; faster computers will convert the files more quickly.) The time depends, of course, on how much of your music is at a bit rate higher than 128 kbps; in may case, that’s just about everything.
So if you plan to use this space-saving technique, be forewarned that it takes a very long time.
Learn more about iTunes 10 in my ebook Take Control of iTunes 10: The FAQ.