The trend is to copy some data from the game dvd to the hard drive in order to speed up loading time, so I'd recommend the 80GB version. I don't know about repair costs though. The PS3 doesn't have memory cards like the PS2. Online play is free, but it's ultimately up to the game company -- they can charge extra money if they want I suppose -- maybe for something like a MMORPG that'd happen... free otherwise.

I have both the 360, and the PS3 (bought recently), and I haven't bought any 360 games since. It's just my preference. I'm more happy with my PS3, than my 360. The main reson for this is that I don't want to pay extra money every month to play online games when I'm alredy paying for a broadband connection.