Will313 -
I've had good luck ordering drives from:
http://www.compgeeks.com/cgi-bin/prod_disp.asp?cat=Drives
Computer Geeks has 2.5 inch drives from 256Mb up to 3Gb, prices
from $22 to $91 plus shipping.
If you look at the pictures for the I-Mod1 kit, they show how a
17mm thick drive can be mounted in the I-opener. I prefer to use
the 12.7mm or 9.5mm thick drives, just provides a little more room.
I've had good luck mounting the drives inside a cutout of the
original heatsink. I've also mounted one drive by mounting it to
fiberglas "perfboard". The board is a nice insulator, so it slid
over the mounting posts for the original heatsink and rested on
the components on the mainboard of the IO. Didn't seem to cause
any troubles with heat, etc.
Drive quality is generally good. There was a lawsuit against
Toshiba (?!) about a year ago on the quality of their very old
drives. The IBM drives I've used worked fine, though the oldest
has been in an IO for only about 3 months now. Maybe a little too
early to tell? 
For some useful information on 2.5 inch drives, connector pinout,
mounting dimensions, etc, checkout:
http://www.storage.ibm.com/techsup/hddtech/dboa/dboajum.htm
This might not apply to all 2.5 drives, especially the jumpers for
master/slave/cable select, but it's a nice starting point.
sod ( "The lunatics are on the grass..." )