I got the 32GB iPhone 4 (which has about 29GB of space available), upgraded from a 16GB iPhone 3. I felt that I needed the extra space if I was going to use the phone for another two years and my various libraries kept growing. I have about 10GB of music. I have probably 30GB of photos, though I only keep the last half dozen or so events on my phone. Then movies I sync when I know I want to watch something. Video podcasts take up space too. Regardless I was really starting to push it with the 16GB phone if I wanted to still bring all that with me easily.

Apps are usually not very big though there are more and more exceptions to that with large games and GPS apps starting to be 500+ MB easily.

So I can't really answer which is better for you though just some thoughts to help you decide.