this will NO DOUBT start a 5400 vs 7200 vs 10000 speed war which i want to state is not my intent right away
i thought i would tell you what i did with my black macbook. i bought
this because of its 320GB capacity and simply opened it up took out the hard drive put it in my macbook and took my macbook hard drive in this case and copied over my data.
i did it this way for a couple of reasons i am a firm believer that a fresh OS install is better than a clone, archive, or upgrade and this allowed me to keep all my data on the old drive to drag over and install a fresh copy of Leopard on my macbook. I also liked having the external case that came with it. my drive wasnt going bad so i was able to just keep it in there as a nice 120GB external but as you mentioned yours is going out.
i love the 320GB but as i mentioned earlier there are many that would rather have a smaller drive and the greater 7200 speed. i didnt notice any difference with my 320GB at 5400 speed except for a LOT more room to put stuff.
there are many options here but i liked this setup.
good luck
i wanted to add that
here is that drive that comes in the passport i linked to above without the case etc..