I have a 13 GB HD that's a bit over half full. I don't download a lot of stuff over the Internet so I wouldn't require a large one.
The computer that I'm constructing sometime in September will have a Western Digital 40 GB. Since I don't download a lot, I wouldn't require a large one, since it's a waste of money this way. With that money, I could get a better video card or whatnot.
Another thing, the larger the HD, the easier it will break. Ten years ago, about 500 MB was the largest you could get. Back then, it was about several tens of clusters per 20 Å. Now it's several hundreds per 5 Å or whatnot. So if some mishap happens and your HD gets scratched by the "needle", a larger amount of clusters would become useless. That means one scratch could take out 6-7 GB of space.