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I've seen this question before and I am sure it will be fine but I want assurance before I do it.

I am looking at running an IRC server with 128MB of ram and 500GB of BW.

The server will usually handle at least 15 people throughout the whole day but there will be times where there can be at least 50 people in it maybe even more. I might also have a few extra channels on there so probably like at least 5 channels and the same people on the one channel will be in the other channels.

Also I am trying to decide on the software to use. I am looking at using NGIRCD but I am not sure does anyone else have any recommendations?

http://ngircd.barton.de/

I want to say thank you in advanced for anyone that is helping me. :)

Ferman
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IRC is a very lightweight service to run. With those specs, I'd expect you to be able to service an order of magnitude more people than you're expecting, so go for it!

EEAA
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I must ask why?

Sorry, but 15-50 and the same people in 5 different channels?? This workload can easily be handled by any existing IRC Network (which i personally see has far too many in existence).

To your question though, any IRCd software you choose can handle such a tiny workload. Speaking as someone with nearly 20 years of IRC experience though, running a server is not all it's cracked up to be, it's not 100% fun and games and YOU have to deal with malicious users. I seriously recommend picking a network and simply creating a channel instead and leave the IRC administration to someone else.

There are hundreds to choose from : http://irc.netsplit.de/networks/

It's basically a "pick your poison" though (if you insist):

IRCd: http://en.wikipedia.org/wiki/Comparison_of_Internet_Relay_Chat_daemons