Question: What is the background on spending money on the menorah? Isn't the mitzvah about the candle and oil? If I purchase a menorah, is it better to buy silver than another material?
Answer: This is no small question as the Mishna Berura (671:1) brings the Gemara in Shabbos (23b) that the reward for someone diligent in lighting the Chanukah candles is that they will be blessed with children who are Torah scholars.
Teshuvos VeHanhagos (2:340) elaborates that this reward applies to those who fully fulfill the mitzvah, paying attention to even the slightest details.
The Shulchan Aruch (671:1) rules that one must be meticulous in performing the Chanukah lighting. Even an impoverished person supported by charity must sell his clothing to purchase oil for the mitzvah.
The Aruch Hashulchan (671:2) explains that, while in general, we don't spend more than a third or a fifth of one's money on a mitzvah (as outlined in Shulchan Aruch 656), when it comes to Chanukah lighting, we spend up to our entire wealth on the mitzvah!
However, this requirement to spend money applies specifically to the oil or candles for the menorah, not the menorah itself. There is no obligation to have an eight-branch menorah, and one is not required to spend a significant amount on the menorah itself.
[There is a discussion among the Achronim regarding whether a vessel is necessary when using a candle for the Chanukah lights or if the candle can be placed directly on a table. Avnei Nezer (O.C. 500) holds that a vessel is required, while others, including Teshuvos VeHanhagos (3:218), disagree and say a vessel is not necessary.]
The Mishna Berura (673:28) brings from the "Seforim" that it is proper to purchase a beautiful menorah that one can afford. The Elya Rabba (673:15) references Seder HaYom, which suggests that if one can afford a silver menorah, he should get it.
The Kaf HaChaim (673:60) brings from the Chesed LeAvraham a listing of fifteen levels of materials for a menorah. According to this list, the order of preference for materials is as follows: Gold, Silver, Bronze, Copper, Iron, Tin, Lead, Glass... From this, it is clear that gold is considered the highest level, and a person who can afford it should choose a gold menorah.
In short, One who is meticulous in performing the details of the Chanukah lighting will be rewarded with children who are Torah scholars. While there is a dispute about whether a vessel is required when using a candle, all opinions agree that a menorah with eight branches is not required. The Mishna Berura says it's proper to buy the finest menorah one can afford. Seder HaYom recommends a silver menorah, and Chesed LeAvraham ranks materials, with gold being the highest.