I bought an Ipad 1 orginally with 64 gb so I could 'future proof' it and use it for a long time. Well, that seemed like a great idea until the ipad 2 came out and I noticed how much of an improvement it was over the first gen. I bought my first one with an extended warranty as well not knowing how reliable it would be so I ended up spending $850 plus tax on it here in Canada. Just recently bought an ipad 2 16 gb, no extended warranty for $519. First of all, if you're someone who really likes the technology and will make a move every year or year and a half it's kind of nice not to spend as much money. On my first ipad I loaded up movies, music, and tons of games on it, until I used basically all of the memory. My primary use of my ipad is at home and at home I'm connected to my home network and use home sharing in itunes for all my music, air video for movies, and netflix for more shows, so I basically stream a lot of stuff and don't need to have it loaded on the ipad. I thought I'd use my first one as a photoalbum and loaded all my pics on it but I found out I rarely used it for that. Also, on my original I had a couple dozen of games, but basically at any one time I'd only be playing a few, and didn't need so many available.
So, like many people have said it really depends on your use of it. For myself, for primarily use at home, it's fantastic with only 16gb, I have it all loaded up with everything I want (around 6 games, several e-readers, some comics, some music) for now and still have 8gb free. When I'm away I just take my laptop so I don't need the big memory in it. Hope this helps.
