You can pretty much use any old crappy system to play mp3 files. But if you want album support and touchscreen, you probably want a system that will run Windows 98SE or better. I have a couple of 400mHz machines running DOSCab jukebox, and they work great. They would work for a Windows based solution as well, but I want to be able to just power them off without worrying about Windows having to shut down first.
I picked one of the machines up for $15, and the other was free. So you shouldn't have any trouble.
As far as hard drives go, the bigger the better because you think you won't fill it up, but you will sooner or later. You won't have a problem with the size being too big using 98SE. The FAT32 file system allows hard drives as large as 2 terrabytes. And I don't think you're going to be using anything bigger than that.
