The smaller the drive, the more is the potential to fill up the drive sooner. As you fill up the drive beyond 75% capacity, the rate of fragmentation can really start to get out of hand. It is, in fact, fragmentation and usage patterns that wear down a drive, not the passage of time particularly.
I would suggest that you look at the price point differences between 40,60, and 80GB. Often the additional cost per GB is practically negligible. More space may actually ensure better longevity.
MTBF is a theoretical design objective and may not reflect actual results. Who is to know what the reality is?
One thing for sure - hard drives are getting better and more reliable all the time. The latest drives use fluid bearings - less friction than the standard ball bearing drives. You'll pay a little more for the fluid types and sometimes $10-20 less for the older standard for similar capacity.