A friend asked me this question today – and here is my take on it (slightly expanded) answer to his email :-):
I have purchased the 8 GB because I had no choice – the 16 GB versions were sold out at the Futureshop at the time, and I was too impatient to wait for two more weeks until delivered from Apple Online store :-).
From usage perspective – whether 8 GB is enough really depends how much video you plan to put on. I am not watching too much video content other than YouTube via WiFi (which is streamed and does not take any space on the device), so for me 8 GB is enough. Main reason why I am not watching video is that I usually listen while walking or driving and one cannot walk very far while concentrating on the screen without bumping into something (I tried that). With driving it is even worse (I did NOT try this one …). If you are willing to sit while watching, the image quality of the device is surprisingly good.
I usually carry 3-5 audiobooks on it (which adds up to about 2 GB), lots of podcasts (TWIT, Macbreak, Security Now, Windows Weekly, HanselMinutes, and few Ruby podcasts) which adds up to another gig or so – as I have only few last episodes to listen to.
In addition to that, I carry about 4 GB is music in case I need something for the treadmill or at work for background noise canceling. It works great. So far, even the most annoying/loud voice from cubicle next to me had not have any chance to compete with Rammstein :-). I found out that keeping about 0.5 – 1 GB free is good idea – in case there is larger chunk to sync. I also use the iTouch as PDA, but even with few hundreds contacts and calendar events, the size of data is very small.
Having 16 GB would only allow me to have more music – I cannot really subscribe to more audio podcasts because of time limits to listen and having more than 4-5 books adds little value. Even with 16 GB version I would not be able to have ALL my music with me – so the main advantage of not having to select which music you carry with you could not be achieved anyway.
But of course, YMMV – and if the above sounds like rather long rationalization of the choice I have already made and cannot change, well – maybe that is not quite wrong either. But it certainly makes me feel good about my selection :-). Besides the price difference between 8 GB and 16 GB is also a thing to consider.
From all the above it looks like 8 GB is sufficient and better deal than 16 GB. Right ? Well – there is a possible catch. When the new iPhone / iTouch SDK will be available (Jan/Feb 2008), it is VERY reasonable to expect that lots of new applications for iPhone/iTouch will be available soon. The most obvious choices will be an offline reader for PDF formats, mail program that will allow read and process your emails offline, News and Feeds offline readers and various forms of Google-gear like applications for various data management with disconnected mode and synchronization via iTunes/http+WiFi. All these have one in common: they will need and utilize local storage. With that in mind, maybe the additional 8 GB can be eventually very valuable and can make real difference how useful the gadget will be.
Your question about using for couple of hours without interaction – sure, no problem. Just make long enough playlist and you never have to touch your iTouch :-). Longest time I did that was 4 hour walk back in November, with only one break to pause it while buying coffee, so that I could understand what the friendly Timmi’s employee was asking.
Good luck with your choice. But I would still listen to Steve’s keynote first – 15th Jan is pretty close. Chances are there may be announced updated version of iPod for the same price – which usually causes price drop at the previous models.