Depends on your needs - I went with 512GB and I currently have 396 GB available. In retrospect I could have easily done well with 256 GB, but if the trend of Apple pushing more AAA games to its devices continue then I'm gonna be doing fine.
I got the M1 iPP 1TB and I think this is the first time I’m feeling comfortable with the space available despite having a nice selection of movies and series downloaded.
I went with 512GB on the 2nd gen iPP and even that felt tight after a short while. I was getting messages about iCloud Photos not syncing because there’s not enough free space despite having 50GB available. I guess back then, the system wanted 20% free (~100GB) for Download and Keep Originals.