Hey Dave, welcome to A.org!
One upgrade path is instead of using a hard drive, to buy a CompactFlash-to-IDE converter (very cheap) and use CompactFlash cards of your liking. No heat, no moving parts, less power usage, less noise, etc. Of course the size will be smaller than the bigger hard drives, but you might not want to move your entire DivX collection to the Amiga (since it won't play without some serious acceleration anyways), so a 4-8GB CF will suffice (I assume you'll be doing mostly gaming, not video capturing, etc).
Good luck!
