With the ability to download previously purchased songs/videos/games/etc again at no extra charge without having to sync to a computer once iCloud is released, wouldn't getting 16GB be fine? I was concerned 16GB would not be enough and I'd have to go with a larger model, but now that doesn't seem to be as big of a concern as far as I can tell since you could just delete for space and re-download later as needed. And if you are getting a 3G model, as I plan to, this could be done anytime/anywhere.
You're certainly correct that iCloud will provide some relief in this area. A couple of things to keep in mind, however.
First, I don't recall whether the "free" storage limits for iCloud have been set, but I would be surprised if the limit is more than a couple of gigabytes. Most vendors who offer this technology also offer paid subscriptions for greater storage. (I back up several pc's to the cloud for example and use about 90 gigabytes of storage for which I pay a reasonable but not insignificant fee each year.)
Assuming the iCloud employs a similar model, the cost of storing, say, 16 gigabytes of data (the difference between a 16 and 32 gig iPad) has to be considered.
Edit: Just checked and it appears the "free" iCloud storage is 5 gigabytes. That's not insignificant by any means, but one should keep in mind that limit when deciding between a 16 gig and 32 gig iPad.
Second, using a 3G connection using iCloud (or any "cloud" storage) to maintain a large and frequently accessed data store can be both slow and expensive, especially if you have a limit on your downloads of a few gigabytes every month.
This is not to say that a 32 (or 64) gigabyte iPad is a necessity. It all depends upon one's use and requirements. But keep in mind that iCloud and 3G connectivity is not a free lunch.
PS.
Note Apple's comments about iCloud...
"When you sign up for iCloud you automatically get 5GB of free storage. And that’s plenty of room, because of the way iCloud stores your content. Your purchased music, apps, and books, as well as your Photo Stream, don’t count against your free storage. That leaves your mail, documents, Camera Roll, account information, settings, and other app data. And since those things don’t use as much space, you’ll find that 5GB goes a long way."
Note the phrase "purchased music, apps, and books." I suspect that means only music and books purchased through iTunes. In my case I have about 20 songs purchased through iTunes and 2500 others ripped from my CD collection. Note also that it says nothing about "movies" whether "purchased" from iTunes or not.
In short, five gigabytes IS a lot of free storage. But also note that music, books, photos, and movies NOT purchased from Apple DO count against that 5 gigs.