I have to say that I like Soulkeeper's idea "... athlonxp 1700+ running at 1.1ghz and undervolted..."; cheap, fast and QUIET ! Keep your money for the next big technological step (AMD's Barton or Hammer) OR the next big Intel price cut... Just my thought...
Anyhow, when you do replace your motherboard/CPU, there are two solutions :
1) Yes, it is possible to directly use your previous OS/hard drive (without a fresh install) to power up your new mobo, but the overall trouble you'll have to go through to make it a smooth transition is a pain :
It involves de-installing all the devices related to your old mobo (through the "system" control panel), including removing the related registry entries which didn't get removed automatically ("regedit" anyone...); not forgetting the IDE, AGP, PCI, ACPI, and other chipset related devices/drivers, plus finding and erasing any mention of the above in all the ".inf" files... oh, yes, and any actual PCI and AGP cards as well, drivers and all (your new mobo will probably not allocate the same resources to the cards, leading to conflicts).
After which, starting up your new system, Windows will detect the new "devices" of your mobo... IF you did a thorough removal job (and even then, some unexplained conflicts, instabilities or other quirks could happen... but you won't know unless you try !)
I've had success before : mostly replacing hardware with same brand, same chipset manufacturer and same processor type... and I've also been through many unsuccessful attempts, no matter how much I tried... So now, for the most part, I'ld rather "fresh install" both my OS and all my applications.
OR
2) Going with the "backup" route. Yes, if you have your second hard drive working fine now in your old system or a second partition on your primary drive : copy everyting you don't wanna lose to it. This, however, mostly applies to your data files, including "exporting" your address book, e-mail messages, favorites, etc. and NOT your applications... further explanations on this later...
Then, you can re-format and re-install the OS on the primary partition with the new mobo, then re-install all your applications. Only then you can go back and access all your data files.
Why can't you keep your applications intact ? Well, most apps need to be registered (hence the name "registry"...) to function properly : paths to ".dll", executables, various directories to use, preferences, etc.
Unfortunately, the words "should just plug in and work" as you wrote ARE NOT part of the Windows world yet... The registry from one version of the OS is not compatible with another. And, even sticking with the same OS version doesn't guarantee much. The registry gets clogged-up in useless or conflicting entries over time : your system may seem fine, you may not notice the gradual slowing down, or you may get the occasional unexplained crash on a more regular basis...
For the same reasons, we should re-install Windows every once in a while even if NOT changing any piece of hardware : just to rebuild the registry !
... and this, of course, implies re-installing all the Windows Updates, security fixes, patches, service packs, etc. as well as all the patches available for your individual applications...
Some maintenance utilities can help you "maintain" your system (i.e. the likes of Norton Utilities' WinDoctor and DiskDoctor, or similar packages from McAfee and others...), but I have yet to see a "mainboard upgrade survival" utility !
All this to answer your "side note" !
Don't despair : the fun is in "trying and learning", isn't it ?