If you pay around $688 + a game or 2, this about the retail market price.
You can get overseas Japanese models for about $550 in both black + white.
In regards to your HD space question, you can actually replace the hard drive with a bigger one. Its really easy, so if u get the chance buy a cheap 40GB model and replace the hard drive to save a few $$$. Theres no difference between the 40, 80 or 160 models. besides the HD space.
The other difference is that the 40 and 60 come with a sixaxis controller and all the new ones come with the DS3