Transferring windows is a different issue. This can be very complicated, so you have two options:
1) Get a disk imager to make a disk image, to move from one drive to another in the most accurate way.
2) Just install Windows on the new drive from the CD you have.
Regardless, after formatting, copying your stuff across should be as simple as drag and drop.
They'll still appear as different drives though.
(If you want to really think about having the two drives appearing as one, think about RAID, with configuration RAID0 or RAID1 for striping or mirroring. However, this will require a RAID controller (ideally hardware-based, you may not have one), and it's very much more hassle than its worth for the average home user. Also note that it makes your data more susceptable to error (in striping)).