If it's your only IOS device then I would go for the largest capacity you can afford. If you already have an iPhone or Touch then the entry level 16GB may be enough. I have the 32GB iPhone 4 with all my music on it so opted for a 16GB iPad. Got a playlist sync'd with around 3GB of music, around 160 apps and still have about 5GB free which I keep spare for loading up SD movies etc. when I travel. I don't need all my 18GB music library on it since that is all on my iPhone hence why 16GB iPad is more than sufficient.
I told a colleague to go for the 16GB iPad since she had the iPhone too but she opted for the 32GB iPad. She now admits that she doesn't need it all and should have saved the money and stuck with the 16GB.
Just be sure what you will use it for - if you are unsure and can afford it then go for the largest capacity. I could afford it but knew I would never need it so opted for the smallest.