REPLACING a hard disk is fairly easy.
A hard disk is usualy held in the case by 4 screws (2 each side)
There are two cables that go into the back of a hard disk, see this picture
http://img519.imageshack.us/img519/7706/snap23 zt.jpg
The cable on the right (with the red, yellow and black wires) brings power to the hard disk. This is called a MOLEX connector.
The flat cable next to it is is the IDE cable that plugs into the motherboard.
So the procedure is:
Turn off power
Unplug 2 cables from back of old hard disk
Unscrew 4 screws that hold old hard disk and remove disk.
Set the master / slave connector on the new hard disk.
Put new hard disk in place and do up 4 screws (no too tight)
Push in 2 cables into back of new hard disk.
Power on.
The PC should recognize the new hard disk.
You then need to install Windows, and you should do a format, even though you say it has already been formatted.