16G iPad 3 or 32G iPad 2?

It's pretty difficult to offer opinions when you don't say how you intend to use the iPad. But it basically comes down to whether you think the increased quality of the display in the 2012 iPad will be worth the tradeoff in storage capacity. That's really something only you can decide. If you have an Apple Store near you, I'd recommend that you go there and look at both iPads so you can see for yourself.

Regards.

Looks to me like you answered your own question ("I don't want to spend more than $500"). I have purchased quite a few computer related products and always went for the largest memory. This time though I changed my thinking, because it is an iPad and not my computer or iPod. I don't need every digital file (eg. Music, Photo, Movie, email folders, etc.) that I own on my iPad. This time I went the lowest config. that I could buy and have the 16 gb iPad (3rd. gen.). I figure that I want as little money as possible invested as possible such that my original investment won't stop me from buying what ever future iPad comes along in the future. I use the iPad like a 'window on the web' mostly, and as such don't need all that many apps., etc.

I suggest getting at least a 32 GB iPad. Apps are getting larger and if you want to view videos or movies you will need the space. I always recommend that one gets the largest storage they can afford.

I agree with Ralph, buy the biggest you can afford. Why not put the money of the extra warranty towards the bigger capacity? - even in the iPad 2 model if you can get! (Extra warranties might give you peace of mind but nothing else in return if you never need to use it.)

First of all Apple is only selling the 32GB model in the new iPad unless there is remaining stock. I agree with above buy the latrgest you can afford! I bought the new iPad 32GB and both the previous iPads where 16GB and I was getting tried on managing space and to be honest I wish I had gotten 64GB. Another option is to go to the Apple Online store and buy factory refrub, they carry the same warrenty but at some big savings.

There is only $100 difference between the size of the memory capacity { The 64 GB is $200 more than the 16 GB }

Once you make a choice, you are unable to upgrade the memory on the iPad.

What are all the differences between the iPad 3rd Gen and the iPad 2? Is the iPad 2 worth the cost savings?

http://everymac.com/systems/apple/ipad/ipad-faq/differences-between-ipad-3rd-gen -2012-ipad-2-2011.html

What are all the differences between the iPad 3rd Gen models? Which should I buy?

http://everymac.com/systems/apple/ipad/ipad-faq/differences-between-ipad-3rd-gen -early-2012-models.html

Should I Buy a New iPad? Or an iPad 2?

http://www.maclife.com/article/blogs/should_i_buy_new_ipad_or_ipad_2

Check Apple's refurb iPad 2. May be less than new iPad 2. Refurbs have a 1 year warranty.

 Cheers, Tom 😉