New hard drives today have capacities starting at 320GB, then 500GB or more. Your PC should be able to handle up to 500GB okay if you can afford it. I can't find any relevant info on the maximum size it can use on the HP website, so play safe and go no higher than 500GB.
The HP website does tell you the maximum amount of RAM you can install, it's 2GB (2 x 1GB modules), and if the RAM has never been upgraded from what your PC shipped with, you will need to remove the single 512MB module to install 2GB.
With the upgrades suggested above, you might also have to change the PSU (Power Supply Unit) if the existing one is the original factory-fitted one, as it's output wattage may not be sufficient and in any case may be tired out after all these years. Better to have power in reserve rather than "just enough". If you've never changed a PSU before, you should ask someone to do it for you.
You will find the lowest prices for all the above items online, but always buy new, not second-hand like many items are on auction sites like Ebay.
For RAM, to ensure you get the right type for your PC, visit the "Crucial" website here:
For the UK: http://www.crucial.com/uk/
For the US: http://www.crucial.com/