We'll I did it and the old girl is working like a charm.
The patient: mid 2007 macbook with 120G HDD. Hard drive was replaced under warranty in it's first six months.
I was pretty nervous about doing it myself.
So after months of procrastinating I made the the decision to get-er- done.
I figured I'd have to do it myself in order to save all the the data.
After the original HDD replacement they installed snow leopard which left me without any OS discs.
I decided carbon copy cloner would be the best option.

So I pop down to the local computer center. Here in Bangkok we a got a computer super mall.

I get a WD 500G back up drive, a WD 500G 5400 replacement drive, an enclosure for the old HDD, and a cheapo screw driver set for about a $100.

I get home and after a bit of figuring how to format the back up(mac OS extended/journaled) I get the source drive copied on to it. I took about 90 minutes to copy.
I test the copy a few times to make sure it would boot.
It seemed to work fine so I got brave an dove in to the Macbook and removed the drive per the simple instruction, and installed the new drive.
I took my time and had it done in 15 minutes. I can see how it can be done in 5.
I turn on the computer and boot the backup drive. It boots fine.
At first the screen tells me I have some alien HDD invader and needs to cope. I select the initialize option. (this wasn't in any of the instructions!)
This takes be back to the disc utility page where I select the format options.
Format done, I start the CCC app and have the backup copied onto the new drive, it takes about 90 minutes.
I shut it all down and unplug the back and start the computer. Bingo, it works, and the new drive seems a little faster and crisper that the old one. I go from 25 gigs of free space to a whopping 380G of free space.
I didn't rename the disc so now I have "untitled1" show up on my desktop.

I go ahead and slip the old drive into the enclosure and presto it boots as well.

So now I gotta figure how to manage all the new drive space.

I had been dutifully making backups with time machine on a 250g external.
I now have three back up drives with pretty much the same copies, which seems like overkill.
I suppose I'll wait a bit to make sure the new Macbook drive is stable and reliable before I do anything rash.
Next I need to bootcamp a windows partition again, which was one of the reasons for the up upgrade. I recently got an android phone an need windows to tinker with it. I refuse to get into the Iphone circus.

Anyway I really happy to have essentially a new puter for less than $100.
I can hold out a year or two longer before I have to buy another Apple product. The new 13" MBP seems mighty nice, but this option was much easier on the wallet. And who knows what kind of nifty hardware stuff will be available in two years.