The thing is you don't actually get 16GB of storage. For my 32GB, I only got like 29GB, so the 16GB will be like 13-14GB. This is normal though 🙂
If you're low on badget or you would like to save some money, I'd suggest you get the 16GB model first and see how it goes, within 14 days and decide wether you need the extra storage or now. Most of the time you don't know what you need until you use it. This is just like the iPad, you have to use it in order to know how magical this device is "For most people 🙂"
I'd say if you're not planning to store any movies on your iPad, you should be JUST fine, because iTunes will compress your photos for the iPad, so it won't sync a full size photo except you import your photos via Camera Connection Kit.