Oh how times have changed. The last time I wrote a big storage post like this, HDD prices were so low I was buying Samsung Spinpoints to use as paperweights. All it took was a little rain in Thailand and suddenly you could trade a 2TB HDD for ownership of an actual human being. Things have settled down significantly since then, but the rise in mechanical drive prices, coupled with a steep decline in the price of SSDs, has really altered the buying equation.
Hard Disk Drives: Expensive, but Still Necessary.
There's just no getting around the fact that, even on sale, most HDDs are at least $20 more expensive than they were before the floods in Thailand. They aren't as excessively expensive as they were immediately following the flooding in Thailand, but you will spend more to buy one today than you would have a year or so ago. Still, you'll want one, even if you only need it to hold your documents and media files so that your SSD doesn't have to. The factors you're looking at haven't changed much:
1. Spindle Speed: The RPM rating of a mechanical hard drive is the speed at which the spindle, and thus the platters (the magnetized disks holding data) inside the drive spin. The higher the RPM, the faster the drive. For a system drive you want at least a 7200 RPM drive, I'd probably also prefer 7200 RPM for the secondary drive to go with an SSD, just to ensure fairly quick response for documents and other data stored on the drive. Storage drives (and drives for a NAS/Server) can be of the slower 5400 RPM "Green" variety.
2. Capacity: 500GB drives are, in $/GB terms, a worse value than 1 and 2 TB drives. If you can find a good deal on a 1TB drive, that's probably the best drive deal available for a primary/secondary system disk. Still, 7200 RPM 2TB drives are more common and affordable now, and depending on sales and pricing can be better $/GB deals than 1TB drives. You shouldn't bother buying a storage disk in a capacity lower than 2TB.
3. Cache: I'd say that 16MB of cache is good for a 500GB drive, 32MB is good for 1TB, 64 is good for 2TB.
4. SATA III: Most newer drives indicate full SATA 6Gb/s compatibility, which is meaningless because they'll never manage to saturate 3Gb/s, much less 6, but it doesn't impact performance and there's virtually never a price premium associated with it. Basically, just don't buy a Hard Drive that runs on IDE or SATA 1.5Gb/s.
I still like the Samsung Spinpoint F3 1TB for a great value primary/secondary system drive. It's speedy, relatively inexpensive (and goes on sale frequently) and, in my experience, reliable. The newer ones are built by Seagate, but the drives are apparently unchanged (I own a pair of the new ones in addition to my older ones, and the controller PCB appears identical), the main difference appears to be where the drive components are sourced from. Per usual, Seagate's Barracuda drives and Western Digital's Black series of drives are both excellent options as well.
For storage drives you have a few options. Samsung's Spinpoint 2TB Green drives have had some pretty serious firmware issues in the past, but these appear to have been solved. Their performance isn't world-beating, by any means, but they are generally one of the cheaper available 2TB drives and they appear to go on sale frequently.. Western Digital's Green drives are solid enough, but they do lack TLER (for RAID usage) and the fairly frequent head parking can be an irritant. If you can find Seagate's 2TB 5900 RPM drive or Hitachi's 2 TB 5400 RPM drive at a reasonable price, those are both good buys. Western Digital has recently released a new Red series of drives, specifically tailored for use with NAS appliances. The stats in general for these drives look very good, so they'll probably be good storage options regardless of whether or not you use them "as intended."
Solid State Drives - Everyone Should Have an SSD. Seriously.
You can buy a quality 128GB drive for like $90.00. Yeah, let that wash over you. Less than a year ago I paid almost $300.00 for a 120GB SATA 3Gb/s SSD, and now I can kick that drive's ass for less than a third of that price. Admittedly, it's still not the best $/GB ratio around, but for the sheer performance of these drives, it's easily worth it. Larger capacities can be even better deals, 256GB drives have been known to go on sale for as little as $150.00! At those prices, you can't afford not to buy one, especially given the big performance jump over mechanical drives, lower power usage, smaller form-factor, and lack of any appreciable heat, noise, and vibration.
When choosing an SSD, buyers will want to look at price, along with 3 main factors that do the most to determine performance: NAND type, controller, and firmware. Generally speaking, there are 3 main types of NAND flash in use these days, Sychronous, Asynchronous, and Toggle. Each has some different performance characteristics, with Synchronous and Toggle NAND generally considered the highest performing overall, though Asynchronous NAND based SSDs can be significantly cheaper. I've noted the major current controllers (and firmware, where appropriate) below:
Sandforce - Ah, Sandforce. Performance, low prices, what more could you ask for? Frankly, stability. Sandforce became fairly notorious early in this SSD generation for the frequent, seemingly inexplicable BSODs that occured on drives using their SF-2281 controller. It took weeks for them to discover the cause of the error, and even longer for the firmware fix to make the rounds, and even now Sandforce drives are, relatively speaking, probably the least stable drives available. Intel's 330 and 520 series SSDs have custom-made firmware that makes them the most reliable of this generation of Sandforce drives. OCZ and Kingston have both developed more aggressively performance oriented Sandforce drives, with firmware to match. Generally speaking, the most recent firmware packages for these drives make them solid enough for "home" use (I own two Corsair-built Sandforce drives and virtually never have any issues when using the newest firmware) and they are often excellent values from a price/performance perspective. Whether or not you pick one of these drives over one based on another controller depends largely on your planned usage of the drive and whether or not the performance of the drive is worth the loss in stability.
Marvell - This generation of Marvell-based drives are considered very reliable, with competitive but not top-of-the-heap performance and excellent value. Many companies make Marvell-based drives, including Crucial's nearly ubiquitous M4, which is an excellent confluence of price, performance and stability (also available in a 7mm version). In addition to Crucial, Plextor has an excellent warranty policy and makes multiple excellent, performance focused Marvell-based SSDs and Corsair makes the Performance Pro, another performance oriented drive based on the Marvell controller. A new, higher performance generation of Marvell controller is about to be released into the wild, starting with the Plextor M5 Pro.
Samsung - Samsung has their own controller for their own SSD, the Samsung 830. Performance is excellent, and the drive is rock solid, just like its SATA 3Gb/s predecessor. The drives are also 7mm tall, perfect for those who have "picky" laptops that only support that form factor. In my experience, these drives are generally more expensive than comparable Sandforce and Marvel SSDs, but not excessively so, and I have seen them on sale.
OCZ/Indilinx Everest - The Everest controller is OCZ's first entry into using their own controllers (previously they had an agreement with Sandforce) and it's a pretty impressive "rookie" effort. Technically speaking the actual silicon is made by Marvell (possibly derived from the next-gen controller in the Plextor M5 Pro) along with custom firmware from OCZ. By some measures, these Everest based drives (right now just the OCZ Vertex 4) are the fastest around, and firmware revisions have kept them quick and reliable. They aren't generally cheap, though.
If I had a gun to my head and had to pick just one product line to recommend, I'd say you're always safe with a Crucial M4. As I mentioned above, they're some of the least expensive drives around, they frequently go on sale, they're available in multiple form factors, they perform well, and they're stable. Not to sound too hyperbolic, but there's definitely a part of me that believes the 128GB and 256GB M4 SSDs are the best buys in storage today.