It sort of depends on where you're watching your movies and listening to your music from.
If you're always streaming then 16gb is enough. If you're going to want to carry them with you and watch when away from WiFi, then go the the 32gb version. And of course there is always the SD card if you need more space.
Personally I have the 32gb. I had no immediate use for it, but I figured I was already spending 'too much' for a toy, what's another hundred...
I think that the extra bucks are better spent on the docking keyboard, so I went for the 16 gigabyte version. You can use a micro SD card for music and video's.
I went with the 16GB and haven't had any issues yet- have LOTS of apps on the internal storage and keep most of my movies/music on the MicrosSD. Along with extra movies on an SD card in the keyboard.
AND for more excessive use a portable harddrive works fine..
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