Hello
You can get cheap 4gig HD off ebay. I got a 2.5" 4gig HD for £30. It is very suitable, and best of all, fits in the A1200 desktop! :-D
On another subject, you may want to get a better filesystem. FFS is crap and has problems with validation partitions sometimes. I have SFS (search SFS on Aminet) on my 4gig HD, and have had no problems. I think SFS is much better than FFS, although most FFS validation problems occurs with HD over 4gig. But it is your choice, FFS may be suitable for your needs. :-)
Regards,
Note: you will need a power flyer or somesort for HD bigger than 4gig!