Just to add to some of the comments above, I've billion row table before on quad-xeons, although with 32Gb RAM, not just 8.
To make sure our performance is good the tables are simplified and normalised as much as possible to keep them thin, and then have just a couple of indexes on them. The main point of those tables, the really large ones, for me, was just to write down time-series data. Lots of writes, all in order, and very few reads. The reads that were necessary were always searching for specific times against another column or 2, and so the index could take care of that.
The tables held on the SAN were backed up automatically by SRDF and on the occasion things did go wrong (disk full, etc) it took about 4 hours to repair.