8gb is plenty. The folks who'd even mess with micro cards are really in the small minority. I think apple has proven that people like simplicity.
If that isn't enough room to throw some movies or whatever on, then you're doing it wrong.
Still, even with the drag and drop method, i think palm is approaching it wrong. They really need an app that walks people through it like itunes. They have to keep in mind that people are generally stupid. I love the cloud approach, but i'm not sure why they can't have multiple approaches.
I picture the average consumer has someone with a blank look in his eye. He gets home with his device, stuggles to hook it up to the computer..and then thinks "now what?" and trained as he is, looks for the CD in the box.
"they said this was a hot phone, but how do i sync it?" he wonders. After a call to palm he ponders this drag and drop stuff they kept telling him about. "Is that a program" he wonders. After logging in to say how palm's customer service blows, he looks at his Pre again.
"aww screw it, i'm gonna go back to my iphone, at least it plays music and video" he thinks. He then wonders if he said that out loud.