Alright, so your motherboard can handle an SSD. It can handle an SSD, plus three other devices (DVDROM or two + second or third HDD). So the question really becomes, what you have installed on your drive. SSD's are getting more and more reliable (I got a quote on some today that had a 5 year warranty), but the better technology comes with a price. There are ways to make your SSD last much longer in Windows so it's not that much of an issue anymore.
Anyway, you should get an SSD. I have an 80GB in mine with Windows and Diablo 3 installed on the root drive and still have room to spare. If money is no option, get 120GB. Programs that are installed on the SSD are going to run extremely fast.
The second thing you should do is one of two things. First of all, don't trust anyone you paid money to give you accurate advice about needing new computer parts. You can most likely put the "bad" Hard drive in another machine, or in your current one once you get the SSD setup, and run a simple "chkdsk c: /r/f" to get it going. That goes over the drive and marks bad sectors as no longer usable, essentially making the good parts still able to used. Again though, if money is no option, get either a 500GB or 1TB drive and use that for storage of large files/movies/pictures/music/whatever.
As far as setting up the SSD... plug it in...done. It's seen as the exact same thing as your old HDD as far as your PC is concerned. Plug it in, boot to the Windows CD and install Windows. Then, plug in the old, or new, HDD and enjoy.
Adapter so you can put the SSD in your PC case
1TB Data Drive
Walkthrough for your PC
Humans are the only creatures that won't live up to the their potential. Give everything your all. When you die, die on E.
So I ask you, what do you intend to do now?