32 gig wifi +3g plus apple case (if money's no issue 64 gig)
My personal experience is that I am using it more often than I thought. I bought mine a a recreational device (movies, browsing, games for the kids...) but now I use it almost all the time. I am a shrink/coach and I use it for showing educational videos, drawing diagrams, taking short notes, making appointments (synched via mobile me), e-mails.
For me it's not "magical", it's the rare combination of being extremely useful and enjoyable.