Slot 8 is nearest to the power supply. Usually the Async card would go in here. Slot 8 is a 'special' slot, and only designed for certain cards.
8-Empty
7-IBM Async card (serial)
6-IBM Floppy controller
5-Empty
4-HDD controller
3-IBM Memory expansion (looks like the "official" IBM 256kB)
2-IBM Black and White Parallel card
1-AST card with serial, parallel, memory expansion and (probably) RTC. Memory expansion on this looks to be 128kB.
It looks like you have the 256kB mainboard, and two memory expansion. I would guess another 256kB on the IBM expansion card and another 128kB on the AST card. That's a total of 640kB.
You will need a monochrome monitor, an IBM 5151 would be the standard IBM one. If you wanted to use a different type of monitor, then you would need to find the appropiate 8-bit card. You could probably find an 8-bit VGA card on eBay that would allow you to use a modern monitor...
There is an IBM 5151 on eBay right now:
http://search.ebay.co.uk/320083230665
The hard drive and controller card don't look original. Probably was upgraded (run chkdsk at C> to see the size). XT's were available with either a 10 or 20MB drive.