You'll need a separate computer that runs software (Tversity) to be able to stream videos to the PS3. I used to do it with a 939 AMD Dual Core, so it shouldn't take much.
As for the hard drive, any SATA interface 2.5inch hard disk should work without any issues.
As for the settings, I didn't...
Too bad you wern't near (Or didn't see) the Fry's ad last week, they were selling an ATI All In Wonder HD for $30 without rebate. That would have been perfect and did more
As others have said, I would wait for the "Google" phone to come out, just to see what it's about and what it offers (Some details have been released but I would wait until they all are).
If you really want to be able to play SNES Rom's and NES Rom's and be able to play them without any hicups...
I just used a 000 and it worked for me. It took some force on the actual screw itself, but I rotated slowly and the screws came off of my 3G without any major issues.