Rapid Repair, an outfit from Kalamazoo, will upgrade iPods to include 240GB of space, using the largest 1.8" drive available. That's twice the capacity of the current iPod Classic.
Unfortunately this drive is only compatible with the original iPod Video versions. It will work in a 30GB, 60GB and 80GB original iPod Video ONLY. Initial compatibility tests indicate functionality only on the iPod Video 5G, but we are working to develop a method to enable use on iPod Classic, and Zune 2G units
They'll send the upgrade for $320, but they're currently out of drives.
News page [Rapid Repair]