You need Ghost or equivalent to do the copy. Do a disk copy unless you want to define a second partition for something.
Before you copy you need to change a registry setting, otherwise when you boot with the new disk some system file would not be found. See Microsoft's knowledge base article Q249321.
Another way to do this is when you boot with the new disk, keep the old one on the computer as a slave or on the other IDE channel. After the boot, go to disk management and make the new disk drive C:, and then you can take the old disk out.
Hope that helped.