Yep, upgrade to Windows 7 first, then clone the drive over. Sorry to repeat what these guys are saying, I DON'T want to take their credit. But in all, this is what you're going to do.
(.1) Post the model of your mother board
(.25) Purchase a PSU adapter for SATA (like Strollin linked)
(.5) Back up your HDD if you want
(1) Upgrade to windows 7 on my new hard drive
(1.5) Back it up (again)...just in case
(2) Install new hard drive
(3) clone my old hard drive onto my new hard drive using XXCLONE
(4) reformat my old hard drive and use it as an extra drive (When you reformat don't use quick. The regular format - the one you should use - checks for bad boot sectors. You need to check the old IDE hard drive (which you will do if you do a regular format) before relying on it for an external or internal (backup) drive.
I even got it down to 4 steps!