Yes, hard drives are easy to install.
OEM is fine, all you need are cables. This is why OEM drives are popular. I have found
ZipZoomFly to have lowest hard drive prices but shop around since I have not priced hard drives for at least two months.
You should look at IDE drives since I do not think you have a SATA controller on your motherboard. You will know if you have SATA or not.
With IDE drives, there are typically two connections on the motherboard. Each connection possesses a wide ribbon cable, which contains either 40 or 80 pins. Each of these two cables has two connections at the end for a Master drive and a Slave drive. It does not matter which drive is connected to which connection since the Master and Slave designation is determined by the jumper position on each of the drives. The jumpers are easy to forget to position properly. The second cable typically also connects with the cd/dvdrom drive.
I would recommend a
Seagate Barracuda 7200.8 like this. Another possibility is Samsung. Seagate and Samsung are currently the most favored but really any of these drives are good: Seagate, Samsung, Western Digital, Maxtor.
An important consideration with hard drives is the quality of the power supply since hard drives are extremely vulnerable to power supply fluctuations. Read
Power Supply 101 for more information. You will probably be fine with the power supply you have now though. Just remember this in case you have problems in the future.
Another important consideration is overheating the hard drives. It is good to put hard drives in the bottom most slot with an empty slot just above it. It may also be a good idea to purchase a case fan and put this behind the hard drives to blow air on the hard drives and keep them cool. Overheating is a leading cause in early failure for hard drives.
Once you have the hard drive and a cable to connect it to the motherboard with, ensure the jumper is in its correct position for placement of the drive on its cable. Once the drive is installed, you will run the
diagnostic utility on it to test the drive and then set up the drive for installation.
You can easily partition and format the hard drive from within your operating system with Disk Management.
You can access Disk Management by:
right-click on My Computer, select Manage, select Storage/Disk Management
EDIT:
for more knowledge concerning hard drive partition strategies, you can google
drive partition strategy and you can also read this thread
Why partition a hard drive???. It is not required to partition your drive with any special strategy. Partitioning and formating the drive as a D: drive with your operating system on your current 20GB drive is acceptable.
EDIT 2:
It may also be a good idea to consider purchasing a UPS battery backup with undervoltage regulation to protect the hard drives (and rest of the system) from power fluctuations.
You may want to devote half of your new hard drive as a backup partition or consider a backup routine.