I got my armor last friday, and it is awesome!
You'll feel slightly cheated when you open it, but hey, that's capitalism for ya. Probably only takes them like $5 to make an armor, but they charge $50. Meh. It's awesome protection, and I haven't regretted it at all.
On to your snugness question --
I have a 40 gig 3G iPod. It works fine with the armor. The reason why it works fine is because iPods come in two sizes, and Matias makes Armors for both kinds. When you're at the Matias website, make sure you puchase an armor for 30 gig/40 giggers. It's as simple as that.
The iPod does fit very snugly into the armor, so snugly that it is possible to turn the armor upside down with the case open without having the ipod fall out. I would imagine, that after years of use, the armor's padding might soften up a bit, so don't try this without keeping your hand under your precious.
I haven't attached the belt clip that comes with the armor, and I don't think I will. The armor looks pretty sleek without it, and I'm not into belt clips anyway.
The only part of your pocket that will touch the iPod whilst Armored is the top, which has the headphone jack and hold switch exposed. And your pocket won't really touch it anyway, since there's a recess.
All in all, I find it to be a worthy buy, albeit a tad overpriced. But hey, you just spent $500 on a 40 gig iPod, why not get it the absolute best protection?