We should point out that we're speaking mostly of hard-drive capacity here. If you were under the impression that hard drives have more to them than just storage, you're correct. Just for a quick rundown, a disk-type hard drive has magnetic disks that spin really fast to record and store data. These are the most widely available hard drives, but they're also the ones you need to watch out for if you drop your laptop (get those spinning disks out of whack and your hard drive follows).
Lately, solid-state drives (SSD) are the Big Thing (Apple has embraced them). Instead of spinning disks, they use the same technology as flash drives for storage. This means that jostling won't hurt them, and you won't get that "laptop burn" when you sit the computer on your knees -- no spinning means no heat generated (not to mention no noise and less power consumed). These are also more expensive, so you'll probably pay a pretty penny for comparable capacity.
Now, let's be clear about a few things that our hard drive will not affect. No matter how much storage capacity our hard drive has, our computer will not run faster. That means if you have 1TB of space and aren't using any of it, your computer will run just as well as if you had 1 TB of space and were using pretty much all of it. (And in this instance, size doesn't matter: If your computer had 1GB of hard-drive space, you wouldn't be faster or slower.)
So how big should your hard drive be? Unfortunately, one size doesn't fit all. Anywhere from 120-700 is standard for most laptops and will be sufficient for anyone who is a run-of-the-mill user. Even for those who store 30 MB photographs like so many paperclips, remember how very useful those external hard drives are. Instead of buying an extremely expensive hard drive to fit every single digital photo you have of pretty autumn leaves and cute calico cats, consider purchasing some inexpensive external storage for parts of your collection. The savings is two-fold; not only are you saving on a hard drive, but you're also protecting your library by keeping it in more than one location.