Keep in mind that about 5gb of the internal storage tends to be taken up for the system, and pre-reserved for apps. Thus, the 16GB version will have about 11GB actually available as storage, whereas the 32GB version will have about 27 available, which is obviously more than double. Of course the system will automatically reserve more as it starts to get filled with apps, so if you plan to use internal storage for the majority of your media, you definitely want the 32GB version.
16GB will be great as well, and does save some money. But $50 for more than double the storage doesn't sound like a bad deal to me, as it ensures that I won't run out of space for all the apps and games I want. I already have a 32gb Class4 card, but I went for the 32GB version. If you're like me, and have a huge music collection, a bunch of pictures, and a few movies on a large card, the 32GB version gives you the convenience to never have to think about deleting media you may want to keep, as you'll have enough internal to move your entire collection of one type of media or the other over from your card.
At the end of the day, it just comes down to whether you can spend another $50 now for peace of mind later, and if that's worth it to you. I've been saving up for awhile, and can carry around the Razr I'm using now as backup, instead of buying an extra battery and charger, which would have been around $50...