The iPhone 4 is just the 4th iPhone model; it's a 3G phone, and won't be able to run at 4G speeds even when Verizon and ATT get some semblance of 4G networks up. (As Zookie's links attest, any carrier who's currently able to even slightly exceed the 3G spec is claiming to have a 4G network, but they're not really near the full speed of the 4G specification.) The iPhone 5 for both types of cellular networks will most likely be released this summer, and it might be a 4G phone; can't know for sure until Apple rolls it out.
In response to your original question... I have a 32GB iPhone 3GS with about 64 apps, 600 longish songs, 5 or 6 books, no videos, and maybe 30 photographs on it, and it's using just under 16GB. If you're going to use the camera a lot -- especially to shoot video -- or if you're going to carry movies or tv shows around on your phone, or if you're going to put your entire iTunes library on it, you'll probably be glad to have the 32 gigs.