Mav, those pics are of what I mentioned, the Eyetech peripheral. Will use your 1200 as a board for backwards compatibility. AFAIK it aint a PC, I think it is G4 powered (so it will run the PPC version of AmigaOE). FOr now I'd say concentrate on keeping your PC and getting an Amiga for playing games and some apps. I really have no clue what machine you should get, but I think the following should be enough:
+ Blizzard 1240 accelerator (68040@50Mhz)
+ one 128MB dimm
+ one good IDE HD (and a proper interface like IDEFIX)
Perhaps A tower. Towerhawks seem like the best.
About surfing the net, you wont be able to use any plugins and stuff. At least not oficial. Basically you have no official support from none of the big companies :P
The AmigaOS doesnt use swap space. afaik it doesnt use virtual memory at all. Unless 3.5/3.9 adds a virtual memory module.
You can use a zipdrive, teh drivers are not done by Iomega though (and you wont get any support from them)
Some A500 gaenms wont work on the 1200 without degrading, even more after you accelerate it. And some will never work. This is a very low number.
Finally, I have no clue how much space takes AmigaOS 3.5/.9 on an HD, since I never istalled it myself.
My advice: get a bare A1200 (perhaps, at teh most, accelerate it) and keep your PC.