Well, for that flash has to become cheaper. Myself, I use a 160GB iPod myself, of which maybe 10GB is music and about 70GB is used for data (the smallest 160GB external hard drive I've seen so far, Apple uses those 1.8" hard drives :)), so I hear you. I really wouldn't want to drop it. It looks like the hard drive there is somewhat (somewhat is the key word) shock protected with foam and 4 springs, but it won't protect from more than a couple of G's drop when the hard drive is on.
The usuals, whatever I post is my opinion, yaddayaddayadda. I'm still learning this, so if you listen to me, well, good luck to you :)