Although I don't believe the speed difference is night/day, it is slower and not all that much larger. If you don't absolutely need the extra 40GB internally, I would get the 160GB. There will be faster/larger 2.5" drives in the [near] future.
You'll probably get external storage for backup and expansion no matter what internal drive you have. And, if you need portability, you can get a bus powered model.
I went through the same questions myself when I upgraded to a 17" MBP C2D in November. It's a 160GB.