I sold my last desktop A1200 a while ago and sort of miss it. But between all my Miggy systems (A500, A1000, A2500), I think I am going to go the CD32 route for AGA games and such. Anyway, if I was to build a 1200 system today, I would most definitely towerise it. Wouldn't make sense not to because as most of us know, once you get bitten by the Amiga upgrade bug(and you will), why not take it as far as possible? IMO, if you're going to want to do more than just game with a desktop system, you're going to want to go with a tower. Easier and cheaper to upgrade in the long run. So, my dream A1200 system, if money and rationale were no object, I'd put something together like this:
PAL A1200 mainboard
Nice hefty power supply
Tower
PowerPC accelerator w/ 060 for backward compatibility
Mediator or whatever PCI type busboard expansion
PCI USB card
USB Ethernet
VooDoo 16mb video (or whatever makes sense to put in there)
Sound Blaster Live! sound card (or whatever, blah blah blah)
IDE-Fix board with CD-R/DVD-R & 8gb+ Hard Drive
2 high density floppies
keyboard and mouse of your choice
OS3.9 & OS4.0 Classic for the PPC side
...now rationale being no object... that's one truism here. If you want to just game on your A1200, get some fast ram for sure OR get an 030 w/ ram and do the WHDLoad thing. If after you realise you've spent $1.5k+ on the system I just proposed and scratch your head later thinking you were "gypped", might as well just build yourself a SAM system, which between a nearly stock A1200 and that, you're right up there in cost comparatively.
Oh and btw: OS3.9 was pretty to look at and do some very minor tasks on an 030 equipped A1200, but OS3.1 might be the way to go if you value snappiness, speed and such. With OS3.1, you can get many plug-ins and 3rd party programs to do pretty much all the things 3.9 can, including getting larger than 4GB hard drives to work.
Good luck and let us know what you decide! I just hope that, after you end up putting all sorts of time and money into your Amiga, that you actually get some use out of it :-) Many of us just end up tinkering, but never really enjoying much beyond that.