When you go to buy a PVR like a TiVo, the first question you're faced with is the size of it: do you want a 40 hour or an 80 hour for a bit more? 40 and 80 hours sounds like a lot, more than anyone could watch in a week, but try not to think in those terms when determining what works best for you. The size of your TiVo really just means how quickly things auto-delete themselves, and answering what size is best for you depends on your lifestyle and viewing habits.
Say you had a 30-40 hour maximum Tivo and you watched maybe two hours of TV a day (say, The Daily Show, an episode of Frontline, and a Simpsons episode). Typically a TiVo will record more hours than you can watch (especially as it grabs shows it thinks you might like), so there will be a good deal of attrition, and sometimes that is a problem. For the ~40hr tivo, this would mean that shows would typically last 3-4 days on your Tivo before deleting themselves to make way for new shows. If you have time to sit down and watch recorded TV every couple days, a smaller tivo drive will work fine. If, on the other hand, you only find time on weekends to watch the previous week's TV you will run into problems. Problems take the form of things like being furious that last week's Six Feet Under was deleted before you ever got to see it, and the repeats of it weren't taped because TiVo already had a copy of it (which was eventually deleted).
For me personally, bigger is better due to my habits. I go for days without turning a TV on, and sometimes I lie around all weekend catching up on the previous week or two. It all started with the last World Cup of soccer, and a 10 day vacation that started just as my tivo would be taping dozens of 2+ hour games. Right before I left I added a 80 hour drive to my Directivo that meant all the games were waiting for me when I got home. Later when I had problems with the tivo motherboard (not related to the upgrade), I decided to upgrade the fresh new unit Tivo sent me. I eventually had 200Gb of tivo storage, which meant I always had a couple dozen movies taped off HBO that lasted literally for months and months. I ended up quitting Netflix when I got this setup, and instead relied on HBO and a few pay-per-view movies to fill my needs. I had dozens of episodes of my favorte shows going back about six months.
Upgrading a TiVo after you've bought one is pretty easy if you are comfortable with taking apart your PC. If not, it is much easier to just start with a new larger drive in a new TiVo that won't need upgrading so soon.