SQL Server Sizing - Hardware requirements for SQL

I am having a SQL Server database of arround 110GB and 250 Users. What
is best suited hardware requirements for handling of such a database. I
am having following requirements from the server:

1. Feeding purpose : On which continously feeding is done by average
200 users.
2. Reporting purpose : on which average hundred of repords are running
at a time.

Right now i am having two servers for both of the above said purposes
with the following configuration.

Feeding Server

HPSERVER 370G4
3.2 Xeon Single processor
3GB RAM
1 SCSI 73GB 15000 RPM(OS & Transaction Log), 4 SCSI * 73GB with RAID 0
(Data Files) and 2 IDE * 300GB (Backups)

Reporting Server

Board SE7520BD2V
2 x XEON 3.2 GHz CPU 800 FSB with 2MB Cache
4GB RAM
3 SCSI * 73GB with RAID 0 (Data Files and Transaction Log), 2 SATA *
300GB (Backups) , 1 80GB IDE(OS)

I want to fullfill both of my requirements from a single . I want to
know what upgrades or changes I need to do in the configuration
according to the load and performence on existing servers. Here is the
table of performence counters along with their values to show the load
and performence for both of the servers.

ReportServer ValueFeedingServer Value
CounterInstanceAvg.Min.Max.Avg.Min.Max.
Pages/sec0.08108.0010.0201.993
Avg. Disc Queue length_Total18.65813.59251.89634.4210175.783
% Processor Time_Total36.8415.46964.45379.83754.688100
Buffer Cache hit ratio97.70293.59599.46397.4177.26199.989
Checkpoint pages/sec000000
Lazy writes/sec1.243030.00314.263097.194
Page life expectancy1748110614
Avg. Disk Bytes/transfer_Total37934.1337903.004128427.74753806.5388025.801141750.562
Avg. Disk Bytes/Read_Total16737.419819242895.86254228.8228170.499143489.965
Avg. Disk Bytes/Write_Total12298.49406553611708.014092842.667
% Disk Time_Total77.55549.976261.966760.35612.5344890.383
Users Connections171718195185212
Batch Requests/sec0.85902373.2150205.009
Transactions/sec_Total1.768018.00159.3143241.814
Page splits/sec0001.0305.007


Please suggest what should be the configuration for my new server.
Should I consider buying an Dual Itanium Processor based system with 16
Gigs of Ram and 8 Hard Disks in Raid 0. Or Should I consider buying a
Quad Xeon Dual Core Processor based system. Or may be my existing HP
server can be upgraded to dual processor and 8 Gigs of Ram and 2-3 more
hard disks? Pls recommend what should be the factors that sould be
considered, guiding priciples and my approact to reach a decision.

With Best Regards
Parveen Beniwal

if your existing systems can handle the existing load
then a 2 x DC Xeon 5160 can easily handle the combined load
but do get a real storage system per above link