I would assume its about 2.5x the size, so 1GB for about 8 minutes? I'd assume the 128 MB of internal memory is for something along the lines of software and such, and probably won't even let you record video onto it. For those that are talking about video quality (which is, of course, not good), the emphasis of all of these devices is not video quality. It's for portability and convenience for videos that don't have to be nice at all. I carry a similar device around just to have at the right moments, and I would never carry a full or even compact camcorder everywhere I go.
That being said, having one at 1080p vs 720p is going to provide very little overall benefit, other than taking up more space...