I just got an 8GB ITouch I synched it to my computer, but it only fit 8 gigs of songs onto the itouch [obviously bc it has a 8 gb capacity], but bc my music directory is about 25 gb, it made a separate playlist for all the songs that would be synched onto the itouch. i could add or remove them, etc. etc. I deleted that playlist yesterday bc I lowered my entire music playlist under 8gb [it was amazing], but i don't know how to resynch it, bc now the itouch is empty.
it won't sync automatically the first time i plugged it in, it will sync automatically. but bc i have an 8gb capacity and i had 25gb songs, it just made a smart playlist and stuck in 8gb capacity and synched only that playlist to the ITouch. i deleted the playlist bc i got my overall music collection under 8gb, but it won't synch the entire collection, bc it's still looking for that particular playlits i deleted. understand? it's hard to explain, i guess.
Oh okay, you made it sound like you reduced the 25gb collection into an 8gb (Yeah, I was like whoa, too) What I did, albeit with a smaller library, was select all the songs, right click and hit "Uncheck selection." Then I went through and manually checked off the albums and songs I wanted on my iPod. Or you could plug in your iPod and I'm pretty sure it'd ask you if you wanted it to create another smart playlist like it did the first time.
Create a new playlist in iTunes... name it "iPod" or whatever. Drag all the songs you want on your iPod over to that playlist (but of course make sure it doesn't go over 8GB). Then when you plug in your iPod to the computer, under "Devices" on the right side, click on your iPod. It will give you the basic info and at the top has several tabs - Summary, Music, Podcasts, etc. Click on the Music tab, check "Sync Music" and choose "Selected playlists". Then check only the playlist you created for your iPod. Make sure the others are unchecked, and then in the bottom right corner click "Sync". Edit - or you can choose "All songs and playlists" instead of "Selected playlists" if you have less than 8GB of songs in your Library.
I also have an 8gb touch, with an itunes library much larger than it can hold. For me, the best playlist I've been able to figure out to make it simple and practicle to use was to take the recently played smartlist, and configure it to contain the last 1100 or so played songs. This way, your ipod holds all of the stuff you've been listening to lately and none of the stuff you haven't.