When I synced my Touch and looked how much room there was, I noticed that the section "Other" was missing. The Space from the "Other" section was put on the "Applications" place.
That reminds me... I really need to find my charger cord.
But to answer your question, yeah, I usually wait until it's dead before I charge it. It's probably a bad habit, though.
Even though most modern batteries such as a nickel metal hydride aren't supposed to develop memory lock I still prefer the habit of letting my batteries run most of the way down before recharging them.
In general I don't charge my iPod until the ...