yes replacing it prolly will get rid of the buzzing noise, more GB just adds more storage space not better performance. any hdd you buy will work with Windows 98, FAT32 is a format type that you choose on installation of the operating system. that hdd(hard drive) will work but i suggest getting a SATA 3.0 Gb/s drive with a 16MB cache. that will increase performance. but that is only if your motherboard supports SATA drives. also, as the name suggests, you will need SATA cables. for the hdd you chose you will need a standard IDE connector.
first off do not buy your hdd from CompUSA, go to newegg.com and order from there. you will get a better deal even with shipping.THIS DRIVE
is the exact same as the one you chose but $25 cheaper. look around and you will find even more deals.good luck.