Got one a couple months ago, they had the PS3 320 with the 'Move' at wally world for $399, so we got it. The 160g without the move goes for $299, the move is $100, so you basically get 160gigs free. That said, if you don't want the Move. You can get the 160gig and if you want more storage, get a 1 or 2 TB external drive for around $100 (costco, Newegg).
The capacity is all about how you use it. It can download or record from hard media; music, movies and games. The games are a little less (about $10) if you download them instead of buying the disc. There are some games you can't buy on disc, like PAIN, which is a 'must have'. Most of the games have down-loadable content (DLC). All of the games record a chunk of info on the drive for faster access as well as downloaded updates for the console and patches for games. You can also down load demo's for most games from the Playstation site.
So in the end:
If it's purely for games 160g is plenty.
If it's for games and music, 320g should be good.
If you're going to use it to record music, movies and download games-use it as a media center. Get what your wallet allows and buy an external drive. Either way, it's expandable.
HTH
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