The ML370 has always been available in rackmount as well as tower configuration but maybe you're after something physically smaller, DL380 G5 in that case. You can either use 2 disks for the OS and transaction logs and 6 for the data, stripe everything accross all the disks or use 2 for the OS, 2 for logs and 4 for data. Again one quad core and 4 to 8GB of RAM will probably be enough. You could run a sizer such as
http://msexchangeteam.com/archive/2007/01/15/432207.aspx but it's hardly worth bothering if your current system works fast enough.
You'll need an external enclosure to put the tape drive in and a SCSI HBA in the server. enclosures at
http://h18006.www1.hp.com/storage/tapestorage/rackmount.html .