It always makes sense to go for the biggest, because whatever you think you'll need in terms of storage, in reality you always end up wanting more. If you decide to store photos and/or video, as well as mp3 files, you'll fill it pretty quick.

The iPod Classic has more than twice the storage for around two-thirds of the cost of a Touch, BTW.

I remember, when I had my first PC at work - the original IBM-PC (twin floppy drives, NO HARD DRIVE back then!) - my boss ordered me an external 20 Meg HDD (yes, you read that right, 20 Megabytes!). When he put the box on my desk, he commented "There you go, it's a monster, you'll never fill that up!". Took less than six months before it was full.