I use the Bamboo pen & touch for photo retouching. It's fantastic. Most people will never need anything more. The exception might be professional illustrators who spend all day, every day drawing.
If you're going to be using it for mostly photography then I'd save your money & get the pen & touch. It still has fantastic sensitivity if you choose to use it (personally I turn it off - I'm a photographer, not an illustrator).
As for size - get the small one. Anything bigger is fairly pointless for retouching. Again, I think the larger sizes are aimed more at illustrators & graphic artists.
Hope that helps.
Iain