Having /home in a separate partition can allow you to reinstall the OS easier without having to shuffle fixes around and back them up (that includes all your settings for all apps too, which would come right back with /home intact) and it would also allow you to keep the users from filling the HDD with personal files.
The size of /home really depends on what you're keeping there. Personally, I have a symlink in my home dir to a directory on my fileserver where I keep all my personal files so my /home/tim dir is pretty small, actually, and I'm the only user on this PC. So for me, I'd use something like 2GB for /home, then a 512 MB swap file (since I don't think I've ever seen Linux use my swap file really ANY that I can remember with 512MB DDR) and then give the rest of that to / .
Those are just my thoughts. Everyone does things differently... I know some people who use a ton of partitions to keep different operations under control, but it just depends on what you're doing.
Good luck!