Apparently there are XBMC loaders you can use to fix 480p issues on v1.6, not sure if all troublesome games are covered and I haven't tested it myself.
Download Links:
Links are hidden from guests. Please register to be able to view these links. All versions except v1.6 have issues with clock capacitor leaking, but if you're getting refurbished hopefully that has been dealt with already.

A chipped console would mean you don't have to worry about HDD upgrade steps so much (you don't need to use a PC). Most chips let you just throw in an upgrade HDD and use a boot disc (like Slayers etc) to format/rebuild HDD, and at least one chip has a format utility built in iirc. You can use just about any HDD (I've never come across one that didn't work but I've only ever used IDE) so no need for sticking to any compatibility list for lockable drives.
If your HDD dies or starts becoming partially unresponsive at some point you can replace it easily without the wailing and gnashing of teeth