What is the minimum INSIDE diameter of hose I would need for the remote oil filter on my 261. I don't have the original. I'm using an aftermarket spin-on bracket. I don't want to go too small as I might not have sufficient oil supply but also, I don't want to go too big as I might not have enough pressure.

The full flow conversion tech-tip (by Dick Larrowe) calls for 3/8" ID lines: Full Flow Conversions

Depends on what type 261 block you are working with. The earlier blocks (and all of the Pontiac 261 blocks, at least as far as I have seen) all use the small id 235 size lines because they are all bypass style motors. The later chevy motors use the larger id lines because they are full flow motors. I under stand that there may be some variations i.e. later motor set up for bypass, but that is the general rule anyhow.

If you use the larger lines on a bypass motor without converting that motor to a full flow, you will bleed too much pressure from the main galley and run the risk of starving the motor and bearings of oil.

To prevent pressure loss, use a plug drilled 1/16" somewhere in the line to or from (not both) the filter housing.
Restricting the feed side from the block (the upper port) will slightly improve oil pressure on start-up, since it delays pressurizing and filling up the filter. It also protects the engine if the filter or housing leaks (which would otherwise drop system pressure if the restriction were in the return line).

It's a full flow 1959. So 3/8" is the minimum? Would I be OK with 1/2" inside dia? I already have fittings for 1/2".

I am no 261 expert by any means, but if this is the filter that is full flow and not a by-pass type, nothing will be hurt with the bigger line. All of the oil is forced through the filter and back to the oil gallery before going on to the engine to feed bearings ect. Then you want the oil flow to be as easy as possible. Does the remote housing have a by pass for cold start or plugged filter? Jay

The question is not what kind of filter, or how much oil, but does it return oil back into the pressure system, or the oil pan?
If it's the pan it must be restricted.

261 engines had 2 options. There is a 1/2" diameter pin that could be left in the flush position for say a fleet vehicle with no oil filter (like the old days). Once the pin (located by the 1/2" NPT oil line fittings) is driven in 9/16" then a full flow filter or a bypass line connecting the NPT fittings is required as ALL the oil is filtered before going to the engine.

Not all 261 blocks have the pin selector option. It does not matter what line size you use for a bypass setup as long as at some point in that bypass system you have a restriction point. My bypass setup has the restriction point in the filter made by FRAM(PB50. The bypass system would allow some of the oil to flow from the main gallery to the filter then run back into the pan. A full filter system will take all the oil from the gallery pass it thru a filter and return it back to the gallery going around the relocated pin or other means used to block the gallery.