Yeah, I think it's going to look like this:
$399: iPad 1 16 GB
$499: iPad 2 32 GB
$599: iPad 2 64 GB
$699: iPad 2 128 GB
And $130 for 3G + GPS.
Is logical, just like what they did with the 3G and 3GS, 3GS and 4
I've got a 32 GB + 3G model. For me it's enough. Movies or TV shows I have seen I always delete, as I see no point keeping it when I already watched it. For me it's enough, and for most others too. 16 GB is just a bit risky if you ever need more than you expected.