Recently asked: "Which is better when buying a new hard drive for your computer: speed or capacity?"
For space intensive applications (audio and video recording, photos), my answer is a larger drive (better if it's mirrored to a second drive). If you're playing games or running a lot of local (on-disk) software, then speed. Many new large drives also offer high speeds, but at a price (often increased heat and lower life expectancy).
I would go for the third option, which is reliabilty.
There's an interesting article on eWeek in "Do We Really Need Bigger Hard Disks?" by David Morgenstern (October 17, 2006) for more on why the latest is better...
"Often, the speakers continued the history lesson with a comparison of hard drive advances to those of some other invention, usually automotive.
"For example, in his "kickoff" speech, Seagate Technology Chief Technology Officer Mark Kryder said that if a 1956-vintage standard car had undergone the same rate of "progress" as a hard disk, "We ought to be squeezing 146,800 people into that automobile today; the price should have dropped to $15; and have a top speed of almost 1 million miles per hour."
"Following the wave of such stories (including his own), Dan Frost of the San Francisco Chronicle blogged a clever response from a reader, which then made its way around a number of storage lists. Here's bit of the post:
"If my car was like my hard drive, I would need to keep an exact copy of everything that I carry in the car because sooner or later the car is going to lock itself, and I will never get into it again. If I decide to go to the trouble of getting into the car, I will have to take it to a specialized mechanic who will probably charge as much as the car cost, with absolutely no guarantee of salvaging anything," the reported author, Dave Hector, observed.
"His final shot was: "You get the idea. I love my car and I trust it. I love my computer, but I don't ever, ever, ever trust it."
In other words, back up often.