The Apple online store has a pretty nice selection of HD's they recommend for Time Machine. I'm not sure if it's still up, but they had a 300GB for $199 on sale, I think.
I was told at the Apple Store to get a drive at least 1 1/2 times bigger than your HDD for Time Machine. You have a unknown sized HDD, so let's say 120 GB. In that case you should get a 180 GB external drive. Hope this helps.
Morod