Any good suggestions for a HDD

That's a good drive. The Samsung F3's are comparable and pretty good as well.

I actually have 2 Caviar Blacks in Raid 0 and the performance is pretty sweet. Basically Raid 0, or "striping", is when data is read/written off/onto both drives simultaneously. Imagine water draining into two pipes at once instead of just one, and you'll have a pretty good idea of what's going on. You essentially get the speed of both drives, which is usually faster and cheaper than getting one with say... 10,000 RPM. The only drawback is should one drive fail, the data is non-recoverable and you'll have to do a fresh install after fixing the problem. Hard drives are pretty resilient nowadays so I think the risk of that happening is relatively low.

Edit: here's a good pic explaining raid 0:

Basically, data blocks alternate between both of the drives when it's being saved. The data is non-recoverable if a drive fails because you're going to be missing the other half. Also, you can have more than 2 drives in raid 0.. the highest I've seen is 4.

Buy a small drive like a 160Gb for the OS then have a couple of massive drives for files.

Ive seen 7200RPM 1TB Hard drives on newegg for sale as low as 60$, you can find better