Any HD will work, as long as it's PIO compatible - and 100% of them are. Well, not all - SATA and SCSI won't, but that goes without saying. But you should be able to go out and buy the biggest and juiciest 160GB ATA/166 UDMA 10,000RPM drive with 8MB of cache and it'll work. You won't get to use much of its power, but it'll work.
Hanging on power up - hmm. Are you sure that its not just a case of failing to boot from cold reset because of spin up? When the computer hangs, try a keyboard reset. Failing that, check the pinouts - set the drive as master (Amiga interfaces don't support CSELECT).
