definately get something over 200GB, You will eventually regret only getting a 128. As for steam; Games that share source material and databases cannot be installed in a user specified location, only the same place that steam itself is installed. For example, HL2, TF2, CSS etc. Best thing to do is install steam on your secondary drive and then just chose the games you want to install to your SSD.
You ask what is the benefit of having an SSD if you cant install steam on it. Having the OS alone installed on an SSD gives you a huge performance boost, probable the most noticeable upgrade you could ever install without going too much beyond original spec. Anything you want to install to it after that is a bonus. Just stick to install the main programs you use on a daily basis and think about how resource hungry they are as well as how much space they take up.