honestly, to me the 32GB is a must. quite frankly I think they should have gone 32/64GB for this generation.
Admittedly, I was not an iphone user previously, but I did have an ipod touch 32GB. Because I was limited to using a lot of apps on wifi, I didn't use it for that as much - i simply used it for the music aspect, with some non-internet based gaming mixed in. I stored every song from every CD I own and used about 21GB of space... With the iphone 4, I had to really pare down my music...
With the iphone 4, I find I am using apps a lot more, and I have a lot more apps downloaded. In fact, I am using about 3.5 GB is apps (mostly Navigon, but still). I have about 9 GB of music (mostly DMB!), about 3 GB of video (and I haven't even started recording my own video yet! Once I do, I could see this increase) and very little space in pictures and other. I think I am using about 17 GB currently. If I want to take a couple of DVD movies on a trip with me, each one uses 2-3 GB. So I know I can manage the space I have, and I haven't maxed the 32GB yet, but it is easy to see how one could. I think 32GB/64GB would have made more sense. However, this is obviously personal preference...