I'm buying a 4 gig. I have an old 20gig iPod and if I really need to lug the entire music library that I don't listen to around with me, I can take it. But on a phone, I'll have it with me by my laptop more than once a day, meaning if I really need to swap some music I can just sync it. I can have a few hundred songs, a movie, maybe even a couple of episodes of a TV show on a 4gig and be fine and I really doubt I'll need more than that in the amount of time it will take me to get from one sync location to another.
Yes, its only a hundred bucks for twice as much space but why load it up with music I'm not listening to?