With current prices, unless you are looking at older, used hdds, the difference between a 160Gb hdd and a 1Tb hdd is almost nothing, in some cases the smaller drives actually cost more due to the limited supply.
You can find anything 1Tb and lower for $50 or less with many 250/500 at @$25-30.
A hdd is one of those parts that I'd never, ever buy used. Most hdds that are primarily OS boot drives will see a useful life of @4 years. Buying a used hdd, there's absolutely no guarantee of age you'll get. You could easily get a 5yr old hdd, or older, that'll last a few days before getting bad sectors.
Buying a used hdd in my book is no different than going to the hospital, and the doctor trying to give you used bandages, because they might be cheaper.