I'm currently shopping around for a cluster-expansion and was shopping
for options. Anybody out here who's bought new hardware in the  recent
past? Any suggestions? Any horror stories?

I think the answer depends on time-frame.  if you're bw-sensitive,
you go nehalem for the time being.  for the near future, I'm interested
to see how AMD's next-gen "istanbul" works out. AMD obviously needs to break out past ddr2/800 - it would be kind of surprising if they went 6c/socket without some improvement. AMD has made a big deal about the cache snooping, but I'm not sure how much it matters for the main market (2-socket). if you're considering 4-socket, I'd certainly think about whether to wait for istanbul.

We've been using Dell SC1435's with Quad-Core AMD 2354 Opterons @
2.2GHz. 16 Gig RAM.

2G/core seems to be fairly safe. although it's overkill for a lot of users, ram is also pretty cheap - 6x 4G dimms for dual-i7 is probably
pretty sensible.
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