<p>Best practices recommend not installing Sql Server to run as SYSTEM.  What is the bare minumum you need to give the user account you create for it?</p>

Typically I create a Domain User with only the specific rights on the network which I will require the server to have (i.e. to write to the network backup drive), I then add the account to local power users or local administrators depending on what needs to be done on the machine, however this isn't required.  I've installed SQL a number of times using a standard user as a Service Account but you need to ensure that the user has access to write to the resources as listed at
https://web.archive.org/web/20081223155956/http://support.microsoft.com/kb/283811
.  Its probably not as defined an answer as you wanted but I'm only a developer (not a professional DBA / System Engineer).
Mauro
PS dont downmark me for saying "only a developer" :P