16" give a nicer ride...the boyfriend's had both sizes, and he's rather happy he downsized.
drop - yes...at least an inch. get rid of the nasty wheel gap of doom.
springs give a nicer road ride than coilovers(depending on the spring rate of the coilovers)...avoid progressive springs, because they'll get progressively lower over time. the majority of people i've talked to with progressives end up hating them.
if you get 17" rims and have more than an inch and a half drop, you can almost expect the tires to rub...i know many people have rolled their fenders to avoid this. there's a diy on Vamp's homepage (
http://vamp.darkravers.net/DIYRollingFenders.cfm) that's pretty detailed with photos.
if you lower the car at all, it WILL have a rougher ride. it's recommended to get new struts if you plan on lowering the car...otherwise, over time, your ride will get more and more bouncy. best bet? get the struts first, get used to feeling the road more, THEN lower. also DO NOT SKIMP OUT ON PRICE! get name brand stuff, or you will regret it.
as a preferential thing...i'd avoid KYB's struts...they tend to blow much easier than the tokicos. they do, however, give a smoother ride than the tokicos do...they're closer to the stock struts.
frankly - this is my ideal setup...in the works. Tokico blues, Apex springs(if they'd ever send me the right size

), 16" rims...ideally TRD if i can get them. unsure about the tire...but that's got less to do with suspension. once i get the springs in i'll be able to give a better review of the setup.