I have a 32GB WiFi model and it gives me plenty of space for MY needs but your needs may be different. It's a personal thing really.
As for Time Capsule, I would love to be able to connect to it but there does not seem to be any way to do this at present. You can use a service like dropbox or iDisk but only for file sharing, not streaming, and even then you need to use a 3rd party application. Hopefully Apple will listen to some of the criticisms in this area and give us some of this functionality in future releases of the software.
So, figure out what you can afford and then try to push yourself to the next model up if possible. Not great financial advice but don't leave yourself room for regret that you didn't buy the 32GB instead of 16GB or the 3G instead of the WiFi. I wish I had got the 3G although I suspect if I had done then I would be unhappy to have to buy another data plan. Mostly I would have wanted the 3G model for it's GPS anyway.
Good luck!
Craig.
🙂