Which would you buy? Having over 20GB of music means neither will be "big enough" to hold it all. I'm more concerned about resale values (last gen's 16GBs seemed to take a bigger hit at resale)
Get the 16gb... but I think at 299 it sits pretty as a decent deal... 229 isn't quite a good a deal as it could be. I would have gotten it at 199
Also I don't ever put ALL my music on my Touch... I use it more for videos and only keep about 2gb of music on my 8gb... I have a 60gb 5G iPod (Classic) for ALL my tunes.