You can look around your locality even. HDDs are going quite cheap even the new ones. With market depressed I can buy 500GB (IDE or SATA) new for not much over $NZ200 which is about $US130 but from what I gather you get HDDs new on clearance even cheaper over there. Seagate Barracuda are good.
You seem to know how to set drives up, use jumpers, and so on, so take your time deciding how you want to set up. You will have to install an operating system and you might find that your existing install CD will no longer activate so will need to advise Microsoft that you are making hardware changes. They have cracked down on multiple activations - to enforce one license, one machine - and are using 'genuine advantage' in conjunction with Windows update to clear out fraudulent installs.
You have been warned enough about keygens, so you probably know the dangers there more than I do. Why waste a good thing on crap software when there are plenty of reputable techs around who can provide you with a good legitimate OS and you can set yourself up to pick and choose amongst (or rid yourself of) Microsoft software development, without the worry of being chopped off at system root. I imagine Vista become a good buy soon if not already. Just look around and ask. Its a good time to buy.
With LaCie, I think the 500GB externals are the way to go. Very cheap by NZ standards. You would be lucky to buy 7.5TB LaCie 5big Network 5-BAY RAID | Gigabit Ethernet (RECON) in this country for less than $NZ4000 ($US2500).