rdunnillYou can use Acronis TrueImage to "clone" your old drive to to the new. Note that there is a $20 rebate if you buy now which brings your price down to $20.
Regarding hardware, I suggest using an SSD for a boot drive. That will give you a huge boost in performance.
See Windows Reinstallation Guide Section 3 for more details, it is advisable to create a backup of your original installation.
However I would personally recommend use of a Digital River .iso and phone activation for clean installation. See A Clean Install of Windows 7 for full details.