There are almost as many ways to move an OS from one HD to another as there are people who will respond to your post. Everyone (techie) has their favorite method.
If properly done, windows will be None The Wiser.
I would use software that I already have and use daily. Norton's Ghost 2003.
I'd first set up, partition and format the new drive to make sure its 100% OK, using my Windows ME boot disk.
Then I'd Ghost the old drive to the second partition on the new drive, in a compressed image file.
Then I'd remove the old drive and restore the Ghost Image from the second partition to the first partition.
With a reboot, the new drive would be up and running with the old OS on it.
And, I'd still have the backup image on partition #2 for future reference.
I do this stuff for a living and have for many years. My method may take a bit longer than some others, but it assures a safe and reliable transfer and NEVER fails.
Any problem with the new drive will usually show up during the partitioning and formatting stages of the process.
Izzy, I sincerely hope that you do NOT buy a Western Digital drive. Almost anything else would be preferable.
WD's quality has slipped terribly in the last year or more.
Seagate or Maxtor would be a much better choice.