I only grabbed a 8GB card and I'm doing fine with it so far. I'm buying cartridges for all my retail games though.
My recommendations for games are:
Uncharted - Sweet game though the touch controls are a bit forced down your throat. Finished on hard and now doing crushing to finish my trophies
Motorstorm RC + DLC - Very addictive, I loved it so much plus the game was free so I opted to give them money with DLC
Tales from Space Mutant Blobs Attack - A good pick up and go platformer for those quick play sessions
Super Star Dust Delta - Good arcade game with lots of challenging and fun modes, if you've played the PS3 one you know what you are getting into
That's all i've got for now, but waiting for hot shots to ship and I've heard good things from it. Also Rayman is supposed to be amazing, that will be my next purchase.