I've used two hard drives:
- Bought a Seagate 250GB 9SD2A2-500 external hard drive about 3-4 years ago. Still works fine. Replaced it due to filling up the space.
- Bought this earlier this year: http://url.llaffer.com/wiihd - works on all of the gamecube games that I've thrown at it, except for two...
I use DM2.9 with the wii modded using Maufrog's guide.
The two games that fail (X-Men Legends and X-Men Legends 2) are compatibility issues with DM and is known. They work fine in DML, so I have them stored on my SD card. If I want to play them, I'll install DML to run them, then switch back to DM when done for loading the other games.