THe Ram upgrade you mentioned should be all thats needed. Vista can't run well on anything less than 2GB.
To determine the RAM you need, run the online Scanner here - use java
http://www.memoryx.net/
You motherboard limits the number of internal hard drives you can install (as well as PSU requirements). You should have at least 2 SATA channels and one IDE channel (2 devices per channel). Hard Drives come in SATA (I or II) inteface and IDE inteface (SCSI is not common on regular Consumer Desktops).
Installing an internal Hard Drive is not always needed, sometimes an external drive will work. People usually only install an extra internal drive if there have a RAID array, or if their system drive is too small for programs (exclude pictures and media because those can go on a second drive).
If this is the case, buy a new internal 3.5" SATA (or SATA II) drive and clone your existing primary drive to the new drive, then swap them. You generally need no more than 300GB for a primary drive, an 120GB is sufficient. Clone your Drive with Acronis True Image (works the best).
500GB is usually under $100.
http://www.newegg.com/Product/ProductList.aspx?Submit=ENE&N=2010150014+1035915133+103530113&name=400GB+-+750GB
Most people just get a USB external drive and put their media and documents on it.
http://www.newegg.com/Product/ProductList.aspx?Submit=ENE&N=2010150414+1035907839+131021357&name=400GB+-+750GB