Hey, all is well, getting around 27hrs battery life on a full charge...its hella sweet compared to the lousy 30mins I was getting before I opened the H320 and found that the battery wires on the original battery were shorting out (i.e breaking apart) which probably was causing the spontaneous shutdown after 30 mins (I would literally go from 3.90V to 3.4 in a matter of a second or two). Of course, once I took out the original battery, the wiring broke right off the battery...good riddance!
As for the last blue piece of plastic...the one that sits on top of the battery and the casing...I just couldn't get it to squeeze it no matter how much I tried, so I took it out and closed the case. It was still a tight fit even without that blue plastic piece. I hope it doesn't cause any problems for the battery.
I'm one happy camper now that I have a fully functioning H320 for taping. I have one more new battery so I think my H140 can use it too so I can use it as a back up recorder/mp3 player and make my H320 my primary recording device.