Well, I just found out in the specs for my current system that it will only support up to 256 MB of RAM.
Any suggestions for specs on a used system purchase are appreciated. Do I just need more memory or should I get a processor over 1 GHz?
Well i use Celeron 1,7 with 768mb ram and it hasn't failed me once (also runs gallery2 and some other stuff). Older INTEL procesors and boards are really cheap now so you shouldn't have to pay much for a new server.
You have enough disk space, but it does depend on the amount of pictures you'll store. Make sure that you use raid1 if you can afford another disk of the same size it can save your data someday.
But you should try to update bios on your board and add more ram first. If it doesn't work buy a used board.