I have a 20 GB hard drive (and no HDMI) on my Xbox, and I have to say that I wish I didn't have to worry about space. I had Left 4 Dead 1 on my hard drive for a few months and not hearing that disc drive spinning was awesome. I'd have all of my games on there (but Halo 3, which doesn't run well from the hard drive and a game of which I am so over).
I'd go Elite, even if you don't think you won't use it. You could, and that's the rub.