It all comes down to how much you want to spend and what's more important to you.
Reasons you'd want a faster HDD:
- to decrease the time that it takes for applications to load
- to increase performance for hard-drive intensive applications (some games)
- to increase snappiness (response time) of the operating system
If that's what you're looking for then a SSD would be the best choice. A year or two ago I wouldn't suggest buying a SSD at all because the failure rate of SSDs was pretty high; but the technology has stabilised over the past year.
If you bought a SSD I'd suggest you take the old HDD out and use it as an external hard drive to store personal files or media content. Generally, you won't be using that stuff as often and the convenience of being able to take them with you without hauling your computer around is worth it.
Use the SSD mainly for the operating system and applications. Having all of your personal files or media content on your computer's hard drive leave them at risk of corruption or loss if your system becomes infected or the drive goes bad. Plus, as the capacity increases the price goes way up.
A 40GB will run about $120 and, as long as you don't need to store a ton of files on it that's pretty reasonable.
Reasons you'd want more capacity in a HDD:
- you have a lot of personal files
- you have a lot of media files
- you tend to store a lot of data
- your data storage needs are growing
If this is the case, just buy a large capacity external HDD.
Prices range from $70 for a 320GB to $150-$170 for a 1TB
Personally, I mostly run Linux Mint so I don't need an anti-virus application (which slow any decent PC to a crawl) and I don't do a lot of performance-intensive tasks so I went for capacity and recently bought a 1TB external. I love it. It's tiny, portable, and has a lot more space than I need (so I won't have to worry about replacing it any time soon).
When it comes to 7200 RPM HDDs, they had their niche a few years ago before SSDs solidified. Nowadays, you're just buying an overpriced HDD that runs hotter than normal and will wear out faster. If you're that concerned about performance just buy a SSD.
One last thing. Before you make your final decision about buying a specific drive look and see what the reviews on Newegg say about it. For hardware reviews, Newegg has the best reviews you'll find anywhere coming from highly-skilled and highly-technical people. Even if you don't buy from there, check out what people are saying about the particular model on their site and I guarantee, you'll save yourself a lot of headaches down the road.