Don,
It sounds like your project is similar to mine. My app is a scientific database that contains journal articles and data related to neuropsychological assessment. The goal is to support evidence-based clinical practice as well as to serve as a basis for research and a book I am working on. The database has 30 tables with up to three layers (parent-child-child). The ultimate size of the database will be in the 1000's of records.
I originally started the project in Paradox several years ago. Paradox was good for its day but it was deprecated and so I had to migrate. After much study (reading reviews, comparisons, mailing lists) I chose PostgreSQL. It is popular (so it won't be deprecated), has excellent documentation, the support group is super, and it is very reliable. It has some pretty important features; transactions and built-in referential integrity. I also develop in a Windows XP environment - without problems.
Regarding resources, my install of PostgreSQL takes up 100M of disk, with 57M used by the data directory (my database is only about 11M). I don't think that's too big of a footprint for modern programs.
I programmed my user interface in Java, using Eclipse. I found the learning curve for Eclipse to be pretty steep and, unlike PostgreSQL, the documentation and community support are uneven. Now that the interface is done, I'm pretty happy with it. The basic interface - without custom features needed for a specific purpose - is available on pgFoundry (the Komo project) and you can use it to get started. Have a look!
For output, I added JasperReports to my GUI and that works fine. Note that PostgreSQL, Eclipse, and JasperReports are all open source.
Good luck!
Michael Schmidt