250gig no question. Think about BF3 - that game has over 5gigs (if not more) of updates already so the 4gig is out for any real games.
A couple of months ago I bought a 250gig slim, with BF3 and Crysis 2 and Forza3, 3months XBL and a controller for R2699 @ Incredible Connection. So you should look around for a similar deal.
EDIT: RROD doesn't seem to be a huge issue anymore. It was only really those initial released units. A couple of my mates have had problems but they were able to just return it without hassles and get a new one free on charge. No real need to worry about that. I presonally haven't had any issues and I have 2. One new 250gig slim, and an old Pro 60gig still going strong around 4-5years now.
