Well, HDD size isn't really something that you can recommend. How much storage space do you truly think you will need? I have two 80GB Intel SSD's in RAID 0, two WD 320's for my media (mostly videos), and two laptop drives, one 150GB and one 100GB that I use for backups of my main files, like documents and music, and these STILL aren't enough for me. I'm almost out of space on most of the drives.
Yes, all BIOSes support 1, 1.5, and 2TB drives. Larger than two terabytes requires GPT capability, but you don't have to worry about that just yet.
How many CDs do you have that you plan on ripping to FLAC? Just remember that a single CD will take up around 650-700MB when ripped in FLAC. If you don't have high quality speakers, then I would suggest just ripping them to MP3 using Audiograbber with the Lame DLL file. This is what my boss does, and he is a HUGE audiophile. But high quality speakers are almost a must have, otherwise you probably won't be able to tell the difference between HQ MP3 and FLAC. (Feel free to comment on this if you have more experience with this kind of thing than I do
How many games do you have? How many games do you plan on playing? What are the HDD requirements for these games?