I have a 500cc Classic (they don't make these any more, having stopped in 2008) and I love it. Bought it new, and VERY CAREFULLY followed the breakin directions in the owner's manual (This is essential). However, I really wish I had the 350cc (which haven't imported to us 'colonials' in the States for some time) as, although one might be able to get 70-75mph out of a 500cc like I have, and maybe 65-70mph top speed out of a 350cc, you never really want to flog an RE like that. They run sweetly between 45-60mph, and the nice thing about the 350cc is that it gets more miles to the gallon (whether Brit or US) than does the 500cc.
If it were my choice, I'd go for the new 350cc with the year's warranty just in case something would need touching up or tweaking. My experience with dealers over here is that they're great and give no trouble on a warranty item if needed.
Best of luck, and enjoy your RE whichever one you choose!