For basic stuff, i3 is fine considering the amount you'll be using it and what you'll be using it for. After recently purchasing a new Win7 desktop, I reformatted the hard drives in the 7-year-old XP desktop and loaded Win7. It is running real fine again and is the machine my husband uses for his playtime. I was impressed with how it cleaned up and before retiring it was running programs like Photoshop and AutoCAD, at the same time.
I'd be tempted to go with a 500GB hard drive though. Especially if you plan to use it move CDs over to iTunes. Hard drive space gets eaten up with operating system and program updates over the years. My first desktop in the 1980s had a 40GB hard drive, and the present new one has two 500 GB hard drives, one for the operating system and programs, the second for my stuff which includes lots of photographs.
Recently helped a friend with his new Win 8 laptop. Didn't like Win8 that much, but really like Win7. Wasn't that much of a learning curve from XP, is stable, and not a bandwidth hog (which is a factor when you live in Yukon using an archaic internet infrastructure). Win7 has also proven compatible with all my old programs, both on the old 32-bit machine and with the newer 64-bit machine.