The games you purchase will come on SMC's. You'll use them just to play the games and that it.
You'll probably want to pick up a 128 MB SMC (the highest capacity that the GP32 can read) to store everything else. By everything else I mean MP3's, downloaded games, emulators, roms, images, texts, ports, etc...
You can write all that junk to your SMC through the GP32, but I have found it to be VERY slow. At least 45 minutes for 128 megs of MP3's. I went out and picked up a $14 USD SMC card-reader and now it only takes about 6 minutes! Very easy to dump a bunch of songs on in the morning while you're in the shower or something and it also doesn't use up the GP32's batteries. Also, you can make windows "Send-to" shortcuts to the different directories and just move stuff over that way. Very handy.
I have not heard of a patch for ASR though and it is very text-heavy, obviously, being that it's an RPG.
Hope that helps.