if you don't backup your music and rely totally on your iPod then you can be screwed. One day that iPod (like most things) will die. Either the hard drive will fail or the battery stops working, etc. Then what? You want to pay upwards of $2000 to get that music back? Unless you have all your music already on standard audio CDs, but you will need to re-import them again. 20GB is no small number, too. But hey, if you got the time to burn.
What I did was to buy an external hard drive and move my iTunes library onto that. They are so cheap right now, it makes sense. Plus the extra space allows me to back up other things, too. As a precaution, I have my iTunes MP3s backed up to 72 CD-RWs.