First, you should have the right version. If you want to check, boot without any mods and go to the legal notice screen in the MS Dash. At the end of the legal notice you should have k:xxxxx and D:xxxxxx
The D: # needs to contain 4290 (I think, might be 4920)
As far as your other question, I built mine, it gives me a few advantages like being able to use the X controller on my PC and hook up a KB to the X in addition to having an action replay.....
But thats just my opinion.
As for cheap mem, check GameStop or Funcoland (Yes I know they are the same company!) they often have used mem for between 12 and 18 bucks.
Morden.