In answer to your questions – yes, my PC has 384MB of RAM – this is made up of the original 128MB, plus the 256MB I added.
Many applications recommend more than this – but it is sufficient for my needs.
And yes, it was a low level format of the hard drive, the format utility is supplied by the drive manufacturer, Maxtor. I calculated that it took over 10 hours to format the 160GB drive (ending sometime early on a Sunday morning, while I slept in bed).
On Sunday morning, I set the bios to boot from my DVDRW drive, inserted my original Windows disk and spent the remainder of the day installing the applications & drivers required.