I will try to answqer your questions.
1. You can dual boot with any HDD as long as there is enough space on it. Your 1TB has more than enough. An SSD is faster than a standard HDD but it isn't a needed expense.
2. If your computer has only SATA2 ports, it will work however you will only get 3GBs per second instead of 6. This is still an improvement.
If you choose to use a standard HDD, I'd use the one you have now. It's better to have too much room than not enough or spending money for a smaller drive. I'd also suggest in either case to leave 10% free space on each partition.
Edited by hamluis, 09 February 2014 - 06:27 PM.
Removed unnecessary quote - Hamluis.