16 GB has been great for me. Although, when I bought my iPhone that was the biggest you could get. For the next iPhone upgrade I probably won't be as inclined to upgrade to the largest because I imagine the smaller one would still be enough.
I went with the 32gig black this should do for awhile. No more release days for me for a couple of years. But I always say that. Release are a lot of fun..... They just get better every year. I do wish they had the same backing as the 2g.