I seem to recall that it did not really make too much of a difference in my case (say about 700MB or so) because I don't have a lot of apps installed. The more apps you have the more space will be used.
My own personal opinion: If you have the option of upgrading (i.e. are not forced by your carrier), then I would hold off until version 5.1. There is a memory leak problem in 5.0.1 which crippled my phone.
Regards,
Eric.