It will drop once you start installing apps
Install Taskiller (need to root first I think) and use it to keep freeing up memory. When my pad drops to around 40MB free it starts to get a little sluggish. I just tap the Taskiller widget on my home screen and all is good again. I average around 70MB free after a Taskiller tap.
To root your phone, install Universal Android. It will fail on the first attempt but succeeds on the second.