For me I've found the 748 to have the best brakes I've owned so far, I think that has a lot to do with them being Brembo's!!
Coming from an '04 R1 that speaks volumes to me anyway.
If your brakes are feeling spongy then its either going to be the fluid or the pads.
If the fluid has been changed in the last two year then there shouldn't be an issue with it.
Check the pads to see how much meat is left on them, or they may just need a clean.
My bike has got braided hoses on, which I'm sure comes as standard?? I would say out of most upgrades these do make one of the most noticeable difference.
Wavy discs are ok but nothing to write home about, haven't seen any on the MotoGP bikes
[Edited on 6-8-2005 by 748IOM]