Definitely the 16GB model for a number of reasons.
I've always thought that if they priced the iPad mini at $249 or below, there would be a good number of existing iPad owners who would have purchased one. There still will be at $329, but not as many and those users probably won't go big. They'll want the mini experience at the lowest cost.
A big audience for the mini will be those who don't currently own a tablet, but avoided it due to cost. They might shop lower cost tablets, but will stretch their budgets for the $329 model.
Of course, there are others who will buy the mini because it's mini. They'll get the more geebee's and cellular, making this the ultra-portable iPad.