Your original post had a lot of questions... You may be better off in future posts to limit it to one. ;-)
If you plan to go the WHDLOAD route (which ROCKS), I would suggest at least 4MB of expansion memory on your A1200. I have 4Mb in mine and it can handle just about any "classic" game using WHDLOAD. Cannon fodder and many more work great. It's great not waiting and swapping disks...
The 1200 is nice cause it can do NTSC or PAL selectable at bootup so most games will play fine. Keeping in mind your monitor can handle the demand. I have a Commodore 1960 multisync monitor and it works great w/ NTSC or PAL... I eventually like to upgrade into a Indivision AGA card with a plain old LCD.
EDIT: You mentioned projects... I would highly suggest swapping those tiny hard drives for a solid-state Compact Flash drive and an IDE interface such as this (or similar)...
http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=110347055534I now have 2GB, leaving plenty of space for games, demos, music, and apps.
