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2.5 sata 7200rpm will work for the case
just buy a real one on ebay official xbox as what these guys are saying is illiegal
Its illegal but because People download games and put it on the Hard drive. But it wont be if that's the reason you intend to use it for. Like putting Cfw on a psp but you don't Download Games. Its illegal but only if you intend to be legal, Dont worry about taking the Step.
You Need the Western Digital Scorpio Blue, that brand is known to work. But its rumoured you cant go higher that 250gb .
use that tool it will make the partitions needed and put files on it not with no profile on it go on live and recover your profile this will sign it for a 120gb hdd. theres a file from what ive read that needs changing to sign hdd's