talking about backup/ripped/downloaded games is not allowed here.
If you go to xbox-scene like an earlier poster mentioned, there is a list of hard drives and their compatability with the Xbox.
I chose to go the non-solder route and choose an xecuter 2.3b lite +, great chip, easy to install.
I have Avalaunch and use it in conjunction with Quix, it is awesome.
You need a PC to FTP all your applications into your xbox such as Xbox Media Center, it does not need to be dedicated, only used when you need to install software onto your box.