Yes, mine is sluggish as well and it's annoying. Scrolling through lists isn't as smooth as other iPods. It seems to lag only when music is playing, which happens to be most of the time if I'm using it.
On a good note, I finally got around to doing some listening tests. Yes, the 5G iPod sounds better than the 4G iPod color! Bass isn't heavy, but it's easily noticably better, more umph and warmer. It can be said the iPod color sounds shrill compared to the new iPod. Also, everything sounds cleaner and crisper. I was very surprised because I couldn't tell the difference between the 4G iPod color and iPod nano, but with the 5G it was easy to pick out the improvements. I was testing using Shure e3c by the way, if that helps any.
There are some audio glitches that I've been experiencing too. When I start to play an album, there is a blip in the music if I change the volume right when the song starts playing. This happens a lot for me since I tend to change the volume right after a track starts playing since the volume varies between albums I play. Firmware update will fix the bug, so no worries here.
I have to say it again, but the screen is the best I have ever seen, though I haven't seen many PDAs recently to compare to them. It has high resolution and small size, and thus high density, so everything is razor sharp. The screen is very bright and visible at 160 degrees from all angles, and it doesn't turn negative like with the iPod color when viewed from the side. Blacks are deep and don't have a glow/shine effect like the iPod color and other cheap LCDs.
The battery meter is woefully off. I've been using it for no more than an hour and it's down 1/6. Others have reported the same. Again, another big to be fixed.
Mine also came pre-scratched
There are two small blobs over the screen that look like permanent fingerprints, as though the plastic wasn't polished completely. They'rel visible under light at an angle, so I'll live with it. I doubt an exchange would be any better, and I don't want to deal with dead pixels.
Despite my initial thoughts, video on the iPod isn't bad. It's a nice feature and usable. The screen is sharp, so artifacts and poor color gradients I see in videos on my computer don't appear on the iPod. The deep blacks the LCD can display helps. Reading credits is easy, as would subtitles I suspect. Videos in widescreen are watchable, but on the point of being too small. But there are bugs too. I have experienced pauses during playback when the hard drive spins up. Playback and scrubbing is sluggish, though I don't think it's a big issue.
I'm pretty satisfied so far