An 80 gig should be sufficient, at least initially. You may need to spend that money elsewhere.
Edit: also, with regard to the screen, you may wish to hold off on deciding the size until you know the final dimensions of the bottom; otherwise, you may wish you had used a larger one. Wouldn't hurt to wait until you had the xbox running on 12v first too.
Edit 2: if you can, find a screen that accepts component in - you should use the highest video quality possible. Actually, I saw on the XBox Scene forums that it's possible to output VGA, and using that with a small PC monitor would be the best quality, if harder to do.
80Gb would do perfect but as I will not have the DVD drive installed on the portable I would like to have all my games backed up onto it as well as music and videos
Yea I'm already hating the small 8" idea I think I'm shooting for the 12"-15" range (multi player would be much nicer)
I'm a "Virgin" at creating portable consoles I've modded many before but never done a portable and while that would be higher quality I don't think it would be worth the hassle unless I could find a monitor for cheap it probably won't happen thanks for the info and keep it coming!