I'm gonna go against the flow here. Buy a USB 2.0 HD enclosure off eBay for $20 and put the drive in it instead. The interface is faster than the max speed of the HD, so you won't notice a speed difference (USB 2.0 is 480mbs, modern drives are usually in the 133 range). It won't be faster, of course, but it'll be just as fast.
If you're up for refreshing your system, then by all means, mount the new drive internally, install everything to it, then put the old drive in the external enclosure and use it for data. 20 gigs of portable storage is handy to have in a crunch.
I have an external USB drive on my main comp where I store most of my media, and I have another one in my car computer. Whenever I want to update my car computer stuff, I bring the HD inside, plug it into USB, and am manipulating the data seconds later.