Just thought I'd update on this. Fitted a Class 10 32GB SDHC card, only a relatively cheap unbranded one, and it works flawlessly. Super fast, great battery life, silent operation which makes recording with the internal mic an option, and more storage. Total cost of the mod £26.91.
Only slight issue I found with the set-up was that when setting it up, disconnecting and re-connecting a few times, on occasion the card was not seen giving a 'No partition found' error. This was rectified by just re-reading the card on the computer using a card reader. Good thing is that when its connected and working it carries on working with no errors, its only when its disconnected and re-connected that it sometimes has this issue. I didn't format the card in the player and instead used a card reader, so maybe that's the reason.
Anyway, this is a great mod and pretty good value for money. My hard drive was still working, but 10 years old and I suspect it was only going to be a matter of time before it failed, so this is a great option to keep this great device going hopefully for many years to come.