You will prolly have to fdisc your new hard Drive first Binos, then just stick your windows cd in the drive and do a clean install.
I have changed hard discs quite a few times this last year, I did as you say, stick the old one in as a slave and copy anything you wish to keep across to your new c drive.
I then put the old hard drive back in as master, format it and do a clean windows install on that, keep it out side the machine as a spare.
I find the present hard discs big enough that its hardly worth haveing a slave in the machine.
I prefer loading drivers for graphics cards ect from the manufacturers discs that come with the kit when I do a clean install, then download the latest drivers and load them.
PS I still use win98 as well, never had the problems with it others seem to have.
I have tried win2k and found it fine, but I do not have the win 2kcd, so I changed back to win98.
Anyway good luck.