Your present hard drive is a 160GB ATA drive. It would be very unlikely that your motherboard has SATA connectors on it.
You could open the case and look for them or you could try and identify the make and model of the motherboard. Even if the motherboard does not have the SATA connectors, you can buy cards to run SATA drives. Though it is far better to have them on the board.
Why not buy an external hard drive and transfer a lot of your data from the internal drive to the external one. This will free up space and if you defrag the drive, it should make it quicker. 250GB for £72 click here
This would also get you over the microsoft problem.