Ideal hardware and software recommendations for TFS 2008

Question

We have almost completed our evaluation of TFS 2008 and would like to proceed with a formal deployment on production. My IT department has asked what hardware and software would I want. The minimum requirements are quite low and I do have the flexibility in ordering high end hardware.

Here is what our setup looks like:

1. 500 MB total size of the source (including external dependencies).
2. One main branch with 8-10 devs
3. One smaller branch with 4 devs
4. Continuous Integration and builds (with tests).
5. All users are within the same building (no offshore teams)

I was thinking of requesting 2 servers. One for the source and the second for the build. Can I please have some recommendations on what server configurations should I ask for? Also, should I be bold and go for Windows 2008 and SQL 2008 or stick with Windows 2003 and SQL 2005?

Thanks in advance,

Nikhil Singhal