Planning my first iMac upgrade...would love your feedback and encouragement

I have a 3 year iMac G5 running Tiger. I have the 160gb drive and have about 11gb available. This is our shared computer (I have a MacBook too) so it stores our iPhoto library (~24,000+ pictures), our iTunes library and our kids and wife's email. I have an external drive that I manually backup to and just recently got a 500gb external. I love the Time Machine on Leopard on my Macbook and would really like to not have to worry about the backups. So my thought is to upgrade my hard drive and OS. I am an IS Director (>20 years experience) but always in a Windows shop. I've built my own Win based pcs in the past and have no concerns ripping open boxes for my friends and neighbors. But -- something about opening up that iMac makes me nervous. Have only added memory. Now for my question(s).
Is this a big job? It should be easy right?
If I'm going to upgrade both -- what order should I do it? I'm thinking upgrading to Leopard, connect the next external drive, let Time Machine do it's thing then putting in the new drive, install Leopard again and then restore from the Time Machine backup. Does that make sense or is there a better way.
Considering a Western Digital Caviar SE16 400GB Internal SATA Hard Drive -- about $80 on MacMall. Sound like a good pick?
Any help would be greatly appreciated. Thanks much. Andy

If you have an iSight things will not be that simple. They are not designed to be user serviceable and are quite difficult to open without damaging the screen and the tape that secures it. If it's a Rev A or an Ambient light, it's not that difficult a job. One really good place to go for drives is macsales.com, you can also take a look at the offerings on [ifixit|http://www.ifixit.com>.

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