I manage to get by fine on an A1200 with 8MB fastram expansion and a 1.2gig HD.
For the vast majority of titles, this is fine. Anything that requires CPU power (like certain AGA demos) I run in WinUAE.
An accelerator is of course the preferred choice and I'd personally look for no higher than an 030 50Mhz. These accelerators offer a great balance between power and compatibility.
If you do a search you'll find issues can arise when you start using certain other higher model accelerators and I don't think it's worth the hassle.
By the way, for real A1200 workbench setups check out the Classic Workbench packs
. One of them (the LITE version) is designed for 2MB A1200's with a built in multiboot ability to save on CHIPRAM and help WHDload games run.