Step by step instructions....
First check to see how much current you loco draws with a multimeter.
Second see what decoders would be compatible by measuring the available space in the tender.
The loco has an 8-pin socket, so to make things easier buy a decoder with an 8-pin plug.
Find a speaker and baffle that will fit in the tender.
See if the tender has holes drilled out for sound, if not, drill small holes into the bottom.
Buy 1 Steam Sound decoder with speaker and baffle of your liking.
Unscrew all screws not going to the couplers or trucks on the bottom of the tender.
Remove the tender shell.
Construct a test track with a resistor in case you should make an error.
Remove the Bachmann 1 AMP decoder and replace with your decoder. Be sure to match up the wires, the pin locations are marked so you should know which way to put it in.
Plug the speaker into the decoder, position speaker and baffle as desired.
Replace tender shell and screws.
Test loco.

You can use most rolling stock, with the exception of Marklin (it is AC) and some European companies that have European style couplers. Also, I highly suggest not buying any cheap cars with Talgo trucks and truck mounted horn-hook (xf2) couplers, this includes Life-Like, Tyco, AHM, IHC, regular Model Power (not Metal train). Look for trucks with metal wheels and body mounted knuckle couplers. Also if you do chose to buy cars with xf2 couplers, you will need to make a conversion car and probably add weight to all the cars.

Knowing which locomotives you have would help a lot and pictures are worth 1000 words. You can upload pictures through Photobucket or Flickr as they cannot be attached if you want.

It is a trace amount of a material that is probably present in many things around the house. As long as a bit of care is taken there should be nothing to worry about. Just do not leave children unsupervised and be sure that no young children can access any of the pieces as they may put them in their mouth.

From walthers I bought a couple 5 or 6 car sets (metal wheels and protomax couplers) for like $20 each because my LHS gets free shipping and a discount. Cost on them was only $12-$15, this was a few years ago though, when they had huge sales.

I have IHC cars that had the same problem as your Spectrum passenger cars. I fixed it by body mounting long shank Kadee couplers, you just need a coupler height gauge to ensure they are mounted level I also mounted then on small pieces of styrene to ensure the boxes were level. The catch is that you need at least 26" radius curves to run them, but they do so with out any issues. I also replaced the wheels with metal wheel-sets and added a bit of lead to add some weight to improve tracking.

What is the best choice depends on your abilities and skills.

From the website: "Items are not available for shipment outside of the US [and its territories] and Canada." This is for the online store, not the parts store, which has a different policy, but even if they ship to the UK, s&h charges would be more than the cost of most items.