Hard Disk size is measured in gigabytes Gb (billions of bytes) and like everything else in the PC world continues to increase in size. 200Gb drives are readily available.
There are a couple of factors that govern hard drive performance access time and data transfer rate.
Access time can best be explained by thinking of a record turntable. When you play a record on one of these, you place the tone arm down on the track you want by lifting the arm, moving it over the track, and then gently setting it down, right?
On a hard drive there are magnetic platters that spin around at 5400 or 7200 RPM. Over each platter is a read/write head that can move back and forth across the platter like the tone arm of the turntable. The difference is the read/write head never touches the surface. When they do it is not by design and is called a head crash which ruins the hard drive!
When your PC wants to get a file from your hard drive, the read/write head has to move to the track that contains the file. The time it takes to get from where it is to the track is called access time.
Once it is over the track it begins reading data from the track. The rate at which it transfers data from the track to the PC is called the data transfer rate.
Access time is dependent on the RPM of the hard drive and the data transfer rate is dependent on the electronics that actually read the data from the platter.
Besides those two factors, fragmentation comes into play. Why, because a file that is in fragments means the read/write head is constantly jumping from fragment to fragment, which takes time, rather than coming down and reading the file from one big continuous section!
For general-purpose computing and storage of a moderate number of files including digital audio and photos, a 40Gb hard drive should be plenty. Don't worry about the drive RPM too much, because when you first access a file it is immediately copied to memory. Subsequent accesses to that file are from memory and the caches that support it, not the hard drive. Your changes won't be saved on the hard drive until a save is performed.
This why saving your work frequently is very important. Until you do, all your changes/updates are only in memory, not on the hard drive. I save changes often with a quick 'alt-F-S" which forces a write back to the hard drive.
For reference, 200 MP3 files take up about 1Gb of space. 1500 digital pictures in low compression jpg format also take up about 1Gb.
If you want to store 'lots' of digital files like audio, video and photos, then a 80Gb-120Gb would be a better choice.
In either case, look for a drive that will support ATA-133 for a high data transfer rate, instead of the slower ATA-100 or ATA-66. This will give you better performance. Most new PCs have disk drive controllers that can support ATA-133 disk drives.