Finally got my paws on it and used it for a while.
IMHO, this armband is useless for sports. It is like a sponge!
I got bigger version and it fits the phone in the silicon case. However seams inside do not allow plastic to touch the screen, so it's pretty difficult to control phone on the run.
I'm assuming you're talking about the TuneBelt right? If so, it's neoprene. While it may "retain" sweat/moisture, it shouldn't absorb it, neoprene is basically sweat proof. It "retains" some of it temporarily, because the material is breathable (which you definitely want) I have the smaller ab82 that I used with my Touch Pro, and I can tell you from using it at the gym a bunch, if you check it a few hours later, it should be bone dry again as the sweat evaporates out of it, doesn't leave it gross or smelly, etc. Wetsuits are made out of the same material for this sorta reason.
As for the seams on the screen.. ya it looked that way in the pictures above. Still, looks to be the only good solution out currently for phones as big as ours.