If you are rooted and not using the Apps2SD feature in Koush's mod, you are really missing out.
I had to reformat my SD as I forgot to unmount it once and Windows 7 was saying it needed to be fixed on each subsequent mount. So I decided to go for it.
Backed up the entire SD card to harddrive and then formatted it using the Droid format under Settings. I then had Rom Manager partition the newly formatted drive and then I reinstalled from the harddrive backup. I moved larger apps like Google Earth, Starfire browser (it was the cache that was large) and little used programs to the SD card and freed over 100MB of space.
It seems to me that the everything is running smoother although I am afraid as I foolishly set the swapfile to be 256MB which was maybe overreaching.
Still, i am much pleased and am loading apps to my hearts content - games and stuff that I wouldn't otherwise dare put on directly to the SD card.
It is so easy! Try it!