If you intend to stick with the stock iTunes firmware, and not switch to RockBox, the reliable upgrades for the iPod 7th gen classic are the 240gb Toshiba HD and the 256gb PNY SDXC + Tarkan. I have built over twenty Toshiba HD 240gb classics, and I still own three today, including the original one I built almost 4 years ago. A larger build may be possible, but iTunes is very limited in the file types you can play, and there is limit of about 55000 files on the pod with the stock iTunes db. For this reason, I have resisted building stock V7 classics above 240gb. I have not yet built a V7 with the PNY, but I have all of the parts on my desk waiting for the PNY, and I know others on this forum have.
Oh,yes, also the CF mods appear to be excellent, and perhaps better than both previous options. Check out davidcotton's posts for more details.
You may have other needs, like a lot of videos perhaps. Test the hell out of it, post your results, and happy modding!