I don't think speed will make much of a difference, neither playback internally nor transfer since it's limited by the USB bus anyway. However, being a portable device, the shock/drop resistance would be considerably higher (based in part on my practical experience with laptops -_-;; )
In my case, it would also be only interesting if coupled with in increase in capacity (i.e. doubled from the 120). Looking at what I have left to rip, even a 160GB HD-based iPod won't be enough.
However, unless I missed something, I still haven't read anywhere here that someone actually successfully installed -any- 240GB+ SSD drive in a 6.5/7G iPod?!? Also, financially speaking, it might still be cheaper to buy 1-2 extra 160GB iPods as spares... even if that means not carrying a full backup of my whole collection around. Maybe the 240GB HD mod might be a partial solution.