i agree with winston. i recently went for an apple tv after much thinking about it, and decided on the 40GB model. at the end of the day i thought my huge itunes music and movie collection and iphoto collection between them was around 160GB anyway, so whichever i went for it wouldn't hold everything. anything that isn't synced to the apple tv gets streamed from your mac anyway, and if you're like me i leave my mac on during the day and turn it off when i go to bed. therefore there was no problem with not being able to access content. the only time you will have problems if you tend to leave your mac turned off except when you're sat at it, as obviously if you settle down in your lounge to listen to some music on your apple tv and your mac isn't switched on, you might find you're trying to listen to music that needs to be streamed and thus you won't be able to hear it.
winston might be able to confirm this, but the other thing i did was set the power settings on my mac to not go to sleep as i think if your mac goes to sleep and your apple tv needs to stream some content from it, it won't be able to.
if you're primarily photos and podcasts i would imagine the 40GB would be fine ... save yourself some money!
enjoy!