T420 Ultrabay is 12.7mm high. It also has a SATA connection inside the bay, which you'll need the matching version on the Ultrabay HDD caddy. You should be able to use the slimmer 9.5mm height adapters but there will be a gap and you have to be a little careful when inserting it. I just ran across this:
http://forum.notebookreview.com/threads ... it.568716/
Kind of a quick-and-dirty hack which could cause more problems (foam breaking down and getting inside the bay). If it were me, I'd opt for the proper-fitting 12.7mm adapter but in an emergency I could use the thinner one.
As far as memory goes, I'd say "bigger is best". The T420 should support a total of 16GB. Buy an 8GB module. If you are patient on eBay you can find one for around $35. Stick to the major brands and make sure the seller offers return privileges. If you have a single 4GB module, leave it in and put the 8GB in the empty slot. Don't worry about having mis-matched modules for dual-channel mode; I doubt you'd see any significant performance difference. If you have two 2GB modules, pull both and sell them to slightly offset the cost of the 8GB module. Once you have the new memory installed, run memtest86+ on the system for several hours; let it complete at least three full passes. Hopefully 12GB or 8GB will be enough for you to do what you want. In another year or two, 8GB modules should have come down in price and you can decide if it makes sense to bump the system up to 16GB.
If the cost of an 8GB module seems too high right now and you have an empty memory slot, get another 4GB for around $15. I think you'll lose money in the long run when you decide to upgrade to one or two 8GB modules later on but you'll at least have 8GB now.