stevenz: I've undervolted quite a bit, takes a bit of playing around to see what's stable, it's not really worth bothering given the powerdrain improvements. It runs fine even at 1600MHz, but I underclock down to 1Ghz as it's more than fast enough and I'd rather have the battery last longer.
Have you ever checked out how much time your cpu spends in each state? The time spent in anything over 800MHz is minimal with normal phone/mp3 player use.
Try CPU Spy (free in the market). It'll display exactly how much time spent in each state, including deep sleep. It's a fantastic little tool.