member of iPod chip design team
I ripped my CD collection to my PC, then copied it to a 4th Gen 40 GB iPod.
Sometimes I listen to the music on the iPod; other times, on the PC with iTunes.
But each time I listen to a song -- either on the iPod or on the PC -- a new "Last Played" date gets assigned to the song file.
So the same song can have different "last played" dates, depending on when it was last played on the iPod or PC.
Because of this, iTunes treats the same song file as two different files, and ends up duplicating a lot of music files on the iPod -- thus taking up unnecessary space.
FWIW, I use "manual update" to the iPod, not Automatic.