This may not be the kind of answer you want. :-)
I don't see the sense in buying a 4 to 5 years old server model, no matter how cheap it is. If you want to co-locate it as a Internet server, then a good VPS instance should give you around the same performance and far better reliability.
Maybe old servers can make sense for something like a game server for a few friends -- but aren't there ISPs specializing in game server hosting for the game you're playing?
To answer your question somewhat, I would hunt around for a Dell or Supermicro server based on a single Core Duo or Core 2 Duo dual-core CPU. This is more recent gear than the SC1425, has around the same CPU performance, and should be cheap as these were originally sold as low-end models. And yes, I would put in a new SATA drive, and check all fans and moving parts thoroughly. Samsung Spinpoint F3 or Seagate 7200.12 would be my choices for harddrive, but opinions very depending on which models/brands people have had luck with in the past.
And last but not least: If you get a old server (you shouldn't) then give it a good burn in test before shipping it to the datacenter.