I have a couple IIfx units and I like OS 7.1 (I have 32MB of RAM each). With 7.1 you can use OT (Open transport) for networking and that allows DHCP making life easy. 7.1 lets you use a ton of apps, and I keep OS 6.x for use on 68000 equipped compacts.

You used to be able to find 4MB IIfx SIMMs on ebay, but I have not looked for a long time. 32MB is about the best you can do on the cheap.