I recently just purchased a PS3 for Christmas with the gift cards/money that I had. I purchased the 80g model since it has backwards compatibility/more features. I also purchased it because of the 5 free movie deal and because I had a $25 off coupon. It also doesn’t matter what size hard drive you choose as unlike the x-box 360 (makes you purchase their expensive hd upgrades) you are able to upgrade your PS3 with a larger hard drive relatively cheaply. It use’s basically a laptop hard drive. Here’s some info/tutorial on how to do that, http://asia.cnet.com/digitalliving/tips/0,3800004921,62032875,00.htm.
So don’t let the size of the hard drive determine which model you choose. If backwards compatibility is important to you and having the card readers for pictures, movies, and video’s then by all means get the 80g. But if you just want to watch blueray movies and play occasional PS3 games then the 40g model is best.
Overall the PS3 is a better system then the 360 but no one really plays on the FREE Playstation network so I end up always getting on my 360. I still feel it was money well spent as some good games are just now coming out for the system that 360 can’t begin to touch. I say go for it.