Time is based more on the size of the files versus a limit on the device. As in, You can only put (less than, due to OS and formatting, etc) 8 or 32GB (On a 8GB, usually you have a little over 6GB to play with, on 32 I think more like 29GB or so).
The 'time' capacity was just done using an average file size and the capacity. The same would be for 'songs' or 'videos' it can hold, like how iPod Classics were 20000 songs in your pocket.
Some quick notes found from a random site while searching:
Well first of all with addressing
overheads , indexing etc actual
storage space is more like 7.95Gb 15Gb
and 29Gb respectively .Generally
speaking , the number of songs which
can be stored on your device depends
on the filesize of each song.No two
songs are the same size usually , a
number of factors can affect this. The
two main factors affecting the size of
an audio file arequality( Bitrate and
bitdepth) and time ( how long the song
is). Therefore to predict the number
of songs your 8,32 or 16Gb Ipod Touch
can hold , a few assumptions will be
made based on the average user's mp3
listening practice. Here we will
assume each song is Cd quality
(44.1KHz sample rate) 128Kbps bitrate
and 4 minutes long i.e 3.75Mb per
song. An 8Gb can hold about 2,120
mp3's songs A 16Gb drive could store
about 4,240 mp3's On a 32Gb drive you
could store about 8,480 mp3's
Typically you can get a DVD movie at
700mb when you download it. This gives
On an 8Gb drive you could store about
10 movies On a 16Gb drive you could
store about 21 movies On a 32Gb drive
you could store about 44movies You can
compress the movie down to a much
smaller filesize and it will still
look good on the small screen ,
allowing you to cram many more movies
in there. Apple claims the Ipod Touch
can hold up to 10 hours , 20 hours or
40 hours of video with the right
factors.Their claim is based on H.264
1.5-Mbps video at 640-by-480 resolution combined with 128-Kbps
As you can see, its not really an exact science of capacity of time. Same goes for CDR and DVDR's - the times are just estimations due to usual encoding and such.
I think Apple dropped this type of information from its advertising/tech specs because especially with the newer devices (which may need more space for OS) it would look like the storage capacity went down (as in, used to be x number of songs at y GB's, now x minus some number of songs at the same y GB's). The only one I see it on anymore is the iPod Classic, and if you have one with that large of a drive, you probably aren't counting much anymore either.
In your case I would probably keep the larger one (unless you need the money), because its never to bad to have extra space.
Do to the updated question (wondering about HD video recording), according to this site, one hour of HD video is about 4.73GB. So with the 8GB you would get maybe less than an hour and a half, and with the 32GB about 4 hours.
Another site has even more information on calculations.