umm, that info is outdated. Back in the days of 9x, it was true that large amounts of RAM would bog the system because of the poor memory management of 9x. With the NT kernel used by 2k/XP, it is much different.
There is of course the argument of more ram vs faster ram, which often gets misinterpreted as meaning that more is bad. Truth is, if you have to decide on more or faster, the answer would depend on how much more, or how much faster. If all you are doing is replacing the current RAM with faster RAM then it will show an increase in performance, adding even more of the faster RAM would also show performance boost beyond that(provided the mobo supports the faster speeds)
If however, you have say, 256MB of 333MHz RAM and you can either double it, or you can replace it with 256MB of 400MHz RAM then you'd be better off with the extra RAM.
HDD size is another matter, size isn't so much a factor in gaming unless you have enough games to fill a large portion of it. The speed of the drive can be a factor though.