You need to do yourself a favor and shell out $7 for Kalemsoft Media Player on the HP app store. It will not only give your Touchpad the VLC-esque ability to play any video format you load on it, but there is a desktop client that dynamically re-encodes your local media files and streams them to the TP remotely. I've got a Backblaze box with 720p videos on it and I can watch them anywhere that there's wifi, its basically like having your own private netflix service without any content limitations. As long as you have ~2mb upload on your home internet connection there are no pauses for buffering, even at max quality.

Actually the Sansa players shipped in the US are only set to MTP by default. This is easily remedied by changing the setting to UMS in the devices' options menu. Of course it is buried fairly deeply in the interface and to a potential ipod convert it will be irritating to be unable to get USB device functionality out of the box. Many of my friends/family use their ipods for portable storage, even those that aren't the most tech saavy.

Not a great call by Sandisk, but also not a dealbreaker. It's easy enough to just change the shipping defaults if enough people complain.

I'm definitely looking forward to re-gifting my e260 and then upgrading to the new e280 model.
8gigs + 2gig micro sd expansion card = yummy ;)