One thing to do with the larger HD on some iPods is to load a bootable copy of your system software. Nice to be able to startup your (or another) computer from it in case of problems, particularly if you're using a notebook computer and you're not near home.
How much storage you need on your iPod would depend on what you want to use it for. And like everything else, leave room for the things you're not thinking of yet.
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Apple Store shows the 30 GB model at $299 US and says it will hold 7,500 songs.
eBay has some 30 GB models for 'buy it now' prices of $289 US.