Basically, as long as each virtual node isn't doing any WORK, you don't need any special hardware. And even if they are doing some work, but just not a lot. We have 5 Linux Xen VMs in production on a 1600Mhz Celeron with 768MB of RAM, works fine, no problems.
The CPU is almost irrelevant - you'll need whatever CPU you'd need to do all the things you're doing, plus some overhead, but it's not like it falls apart.
RAM is the only critical thing. You need at least 96 MB for the host and 24MB for each additional live Xen VM, as I recall (That's probably not precisely right) But you'll naturally be swapping a ton if you do that. A more reasonable VM has 128M - 256MB of RAM itself, so you need that for each active VM. But again, that's only for each one running at a time.
Or if you are going to swap a bunch, get better disks
In any case, I definitely wouldn't climb the price curve of equipment to do this; don't buy anything on the bleeding edge - look at arstechnica and just max the RAM on a value box - or maybe upgrade the MB to something that takes more RAM.
Used, commodity computer equipment is usually not price effective compared to the cheap end of what's still available new. But pay attention to the price point where it's cheaper to get (and power, while they're on) TWO value boxes than to pump up the one box you've been thinking of higher.