always go with the largest HD possible!
4 is fine for game saves but you will want to download all the free demos and they fill up the HD fast
+ if you buy any games on line you need the space
If you're not going to download anything else the simple answer is yes.
With the ability to use an inexpensive USB drive to extend your storage space too you can get a lot more mileage out of a 4GB system now than you used to for basic usage.
Heck, of my cloud saves, I've only used 350 MB and I have a ton of games! My old 360 only came with 512 MB of flash memory which I haven't even used (I use my 250GB HDD).
and just for clarity's sake, that 4 GB is flash memory. Not hard drive space. That's a distinction that many software will note.