Can't transfer any more music;only half full (by 2 users)

The filesystem has a limit to the number of files that can exist in one directory (around 100). If you are putting all the music in the same directory, the device will appear to be full even though there is a lot of space. The solution is to put your music into folders (per album, or whatever).

I use my ilo with linux. I noticed when i "delete" files from the ilo, it really just puts them in a .trash folder on the ilo. The problem is that this is a "hidden" folder. To fix this I have to ..
1) make sure I can view hidden folders.
a) In linux, look under View > Display Hidden Files
b) In Windows, I think it's under Folder Options, under the Advanced tab. Just make sure you can view all hidden files.
2) delet any folder with the word "trash" or "recycle" in it.

Now I should have all of my space back.
To prevent this from happening, I do a true delete on files and folders now.
1) In Linux, select all of the files/folders you want to delete, then hold the shift key down while pressing delete. This should bypass the trash bin and wipe the files completely.
2) In windows. I think the same thing works. If not, select all of the files you want to delete, right click on them, and choose Delete instead of Move to Recycle Bin.

I don't use windows often, so those instructions might be close but maybe a little fuzzy.

Reformat the drive (mp3 player). I had the same problem. I used Helium to tag my songs, and when I tried to upload them, I could only get 512M onto it. I reformatted it to FAT32 and was able to utilize my MMP8656 to its full 1G capacity.