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For reading books, the basic 16GB model is more than enough - you could store tens of thousands of books in that. If you want it for music, and especially for video, though, then the more memory the better. I have the 64GB 3G model and don't regret paying the extra.
I'm afraid I don't know of any way of accessing an SMB network share from the iPad, or streaming video from such a share. Perhaps someone else can assist with that?
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