Well if you have everything backed up, then we really don't need to. Basically I was going to have you install the other drive and erase it using the manufacturers tools, then backup the entire new drive to the old drive. If you are satisfied that you have everything backed up, then we can press on. I do want to point out a few places to check to make sure you have everything backed up. Make sure you have Favorites or Bookmarks, any e-mail if you use an e-mail client. Also look at the software you use. If any of it has some sort of database to it, make sure to back that up as well. Any music, movies, or pictures. And personal letters or documents.
As for the actual installation, you have to make sure your computer is set to boot to the DVD drive. To check to see if you are stick the windows install DVD in and reboot your computer. If you get a message on a black screen that says "press any key to boot from DVD" , don't touch anything, just let the computer boot normally, and let me know if you got the message.