This is the space that stores the necessary files for operating your ipod. It contains things like the menu screens and icons, the essential applications (like the music playing software and clock) and software code for things like volume control and power management. It takes up very little of the total space on most ipods and cannot be removed.
I've read on other blogs that "other" also includes Album Art (which can apparently be quite large). An option would be to turn off the setting to get album artwork and see how much that reduces your "other'.
"other" is the space on your ipod where all of the defalt settings are held. like contacts, mail, safari, stocks, weather, notes, album artwork, ect.
if your ipod is jailbroken all of that info is held under other too.
It means to show that it can be used for storing softwares to transfer the songs or videos in your ipod to the mac or pc. The space can also be used for storing games that are compatible for the ipod. By storing transfer softwares you can listen to the music in any systems.