As consultants, it used to be simple to help our clients choose a model. We simply helped them decide if the needed 3G access and how much storage capacity they required.
Aside form the confustion the odd naming choice for the new iPad creates, the substantial upgrades to the iPad's screen and processing power are making it much more difficult for consumers to choose which model to buy.
With the iPad2, the first choice was to decide if you needed 3G. For many this was a simple choice. They either already had a smart phone with 3G and GPS and were fine with the iPad being WiFi only or they knew they were addicted to the internet everywhere on their phone and wanted the same experience on the iPad. After that decision was made, it was simple to determine how much data (songs, pictures, movies etc) the would require to be "on" the device, and then choose a model with appropriate storage.
Enter the "new iPad" and now some of that simple logic flies out the window. So now the decision to get an iPad that is data capable is more complicated. The new iPad supports 4G LTE so if you are in a city where you can get those speeds, you may find that is a faster connection than you can get for your home. The services offered by AT&T and Version are different so you have to choose a different model based on which provider you are going to choose. iClcoud and other cloud services like dropbox now offer you a way to get access to your "stuff" over the air. This is wonderful as those audiofiles who have huge music collections don't have to carry all that on thier devices any longer. However if you want to listen to that cloud stored music or access those cloud stored files any time, you probaly wont be happy with a wifi only iPad.
Speaking of those files stored in the cloud, it was common before that we would coach clients to just keep most of their files in the cloud and then get one of the low end iPads with 3G as they could then download their files as needed from almost anywhere. That of course is still true for many people. However, with the new higher resolution screen, new higher resolution still and video cameras, and the processing power to shoot, edit, and post high resolution images or videos without ever leaving your iPad, it may be time for many to think about how much storage the really need on the iPad.
I hear it said that release of the new iPad just converted it from a consumption device to a creation device. That may not be true for everyone, but the new options available to us on the iPad will certainly make our buying decision more complex than it was in the past. For me, I am upgrading from a first generation iPad with 3G and the smallest storage capacity to a new iPad with 4G and the largest storage capacity availalbe.
Oh... and I almost forgot.. If price is your main concern, there is still the option to buy an iPad2 starting at $399 for wifi only. And when you think about what an iPad offers over something like a Kindle fire (at $199) I think many people will decide they get more than twice the features for the 2x price.