I think the 16GB version has around 13.7 GB free or so (anybody know the exact number?). If you have your own ripped music, then you can store as much as that, and how many that is depends on how you ripped your music. I think AAC is supposed to be smaller than mp3 at the same quality settings.
I agree with the other posters...if you want to store a lot of music in addition to other apps, then get one of the larger sizes. Personally, I would not consider anything less than 64GB and for me that is not enough, and I have take all of the music off of my iPad (it is on my phone instead).