This machine should do you fine, other than the RAM. I've got a single 1.6GHz here at work with 1GB of RAM and it's one of the fastest machines here. All of us work in InDesign, Photoshop and Illustrator all day.

Anything above 1GB of RAM should do you fine. If you can easily afford 2-4GB of RAM, then you'll be set, but I'd recommend getting a little less RAM and spending the extra money to match your computer with a 20" Apple Cinema Display. I've got one here at work and they're sweet.

They're still teaching Quark in schools?

newegg.com

I've got some RAM you can buy.

Out of a Powermac G5.

i personally only use crucial/micron, though it's just a personal choice.

newegg is not always the lowest, but when they're not they are with in a few dollars, plus they have great customer service.

You might want to check out LaCie's selection of external hard drives. I'm not sure exactly how fast they are, but I know they have some that utilize the FireWire 800 port, so I'd imagine they're pretty speedy. You'll have to search out some reviews to see if they'd be worth it I guess.