For starters, it's got a Serial ATA drive so you should be able to pick the size of 2.5" SATA drive you wish/need.
Drive costs? It all depends. A look at
Aria gives prices from £24 for a 160gig drive to £68.39 for a Terabyte (plus postage, of course). Your laptop came with a 200Gb drive, so the choice is yours regarding whether you want to go higher or lower regarding capacity and that depends on your own usage (personally I always believe "bigger is better").
Fitting should be VERY easy, normally you only undo a couple of small screws, remove a small cover and there you have the drive which might be in some sort of caddy meaning there's some more screws to remove, I don't have a Sony laptop so I can't be more specific. But it uis generally a very simple operation. After that, the fun starts as you will need a Windows DVD (for Win7, cd for XP) or some sort of backup tool which can be run from cd as the recovery option on the laptop will not work with the new drive and your backup, it only works by reinstalling from the recovery partition on the old drive. Hiren's Boot CD is a nice option to use as it has verious tools you can use and it's free.
Hope that helps.