Simplify works great in that it streams my iTunes library off my laptop to my iPhone. So although my iPhone has no where near the storage required (>100GB) I have full access to my music library. The one drawback with Simplify is that it cannot run in the background like the standard iTunes app. For music I do have on my iPod, i can browse the web, Facebook and Tweet away with music in the background provided by iTunes. Not so for Simplify... So please Apple, release iPhone iTunes streaming in your next 3.1 OS release!
Addendum: Yes Apple, I would even be willing to pay a "mobile me" tax for access to this feature!