I don't know about firmware 2.0 but on all previous versions we had limited space available for 3-rd party apps and we had to use BossTools to move apps to the Media folder.
How it is now with 2.0? Any limitations of space available for apps?
In quickly looking at the App Store via iTunes this morning, it appears that many apps are only 1 MB or less. Yes, you read that correctly - less than 1 MegaByte. Super Monkey Ball was much larger, but still only 35 MB. A number of other graphic-heavy games seem to range from a few MB's to 50 some MB.
In other words - a 16 GB iPod touch or iPhone should be able to handle dozens or more games and apps with no issue. I suppose apps may get more bloated as more features get added, but that is pretty standard.
Hope this helps.