I have the 80gig version...and you can upgrade that too. No reason to buy the 160gig if you're planning on upgrading. Other than having a bigger drive, right out of the box, they're the exact same thing.
When my girlfriend bought mine, I was using a regular 32" TV. I promptly went out and bought a 50" LG LCD and thought I was in heaven. I have never had mine online, but have friends that do it and there's alot of really cool stuff you can do, including surfing the net.
I download PS3 themes onto my laptop, copy them to my flash drive and then pop the flash drive into the PS3. You can copy music, pictures, etc from laptop to PS3.