Yep, PC spec is fine, if you plan of having a lot of Squeezeboxes, I'd consider increasing the RAM to 512Mb

For the hard disk, you could get something like the IcyBox and just put any hard disk you want in it, thats what I have for backup.  I would personally avoid Maxtor though, they are IMO unreliable.

Wireless should be fine as long as you get a wireless G router and don't have it too far from the Squeezebox

I'd also suggest FLAC, I use CDex and FLAC which work perfectly

If you need any help, just send me an email (andrew at audiofi.co.uk)

Andrew