I say go for 3.9 and trim it down rather than get 3.1 and spruce it up. More stability and support for things that way. But 3.1 should do fine too probably. If you get 3.9 though you get 3.1 on the CD so you can install just 3.1 if you find you don't like 3.9!
One thing to remember is that 4GB is *HUGE* for an A1200. These things came with 80MB hard disks! Stick with 4GB as it'll make life easier later on. If you really need more (very unlikely) then change to 8GB or more, as long as you're using 3.9.
Go for a Blizzard 1230Mk4 @50 MHz, I think, with 32MB of RAM or maybe 64MB if it's the same price, either is plenty. Don't go for 68040s as they're not all that much faster but run a lot hotter, and an 060 is pointless without a graphics card (Indivision is not a graphics card for these purposes! But get one anyway!)
Lastly, enjoy it!
