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We have a pair you can have for free, one is a picasso and one is just a regular clown. WARNING: They are aggrssive as all hell and will probably kill anything you love. We call them the John Wayne Gacey clowns as they are killer clowns.
Ours destoyed the aiptasia, and then started working on our corals so they had to go, and they were captive raised. Our copperband was still the best for aiptasia control but they are so hit or miss getting one to live.
We have done this with tigger pods before from reef nutrition. Nothing more than a vase, and some food. We had cultures that could last for a few months. I think Nikki did a write up on it at some point. We will have to see if we can find it.
www.glassholes.com sells the kits (look like they are not in business anymore but look up their style) and the overflows and I believe has the instuctional videos. All you need is the drill (their kit has the blade, template, all the plumbing pieces and the overflows) and most people on here...
Honestly I think you can run a great reef tank with either, it just really comes down to your preference to aesthetics and maintenance. Looks wise having a sump and everything out of the way just look better, we ran HOB for a while and it worked great, it just kind of looked a mess with...
I found a few threads on R2R regarding the white egg crate, and one suggstions was to soak it in hydrogen peroxide. I don't know what the ratios are (they did not say) but according to that person it cured the algae problem and it did not come back.
It could be the white egg crate itself that is throwing off the nitrate and phosphates. Most people stopped using it and went over to black egg crate or acrylic racks. If you do some searching around on R2R I believe there are threads over there explaining it.
40 breeder is a great start and I am sure will get you looking at something bigger down the road. Let me know if you want any corals, have a bunch of zoas and some SPS that can be fragged.