5 gig is plenty, I'm fine with 3-4gb and by the time you actually desperately need that extra space I would expect the 120GB to be a lot cheaper.
Delete some of the old stuff, since I'm guessing you've still got GRAW 1 chapter 2 on there somewhere? If so are you really going to go back to GRAW 1 with GRAW 2 out? (or possibly a 3rd GRAW in the future) Yes we both paid 1200 points for it but if were honest none of us will ever use it again with better games out.
Even if you do delete stuff you've paid for there is nothing stopping you from ever re-downloading it again in the rare chance you will go back to it.