Get as much RAM as you can afford. It's NEVER wasted.
With wave table software like the Roland Virtual Sound Canvas, the sound card can be made to sound great with midi playback. Get at least a 40 GB HD to store MP3 data and get a backup drive (external) or ethernet connection to a desktop for transfers.
I use a very modest PIII 600 Mhx gateway with a 20 GB HD and I have over 4000 audio files and over 10,000 midi files on it.
Defrag often and "baby" it during transit.
WIN98se is still my choice for O/S because XP is still not compatible with all music stuff. I'm waiting for "slam dunk" reviews before I upgrade a system that works flawlessly.