Jumpers Settings = Master/Slave?
Depends on how your drives are configured at the moment.
Slave will be used if you share the same cable with an existing drive (Master).
Master should be used if you share the same cable with an existing optical drive (cd-rom/dvd roms are
Slaves).
Master or
Single Master will be used if the drive is on its own cable. Slave drives should never be used on their own cable without an accompanying
Master. There will also be
Cable Select - avoid issues by not using this mode.
And since I'm getting OEM, you said it probably won't have a manual, so how do I figure out which to put on Master and which to put on Slave.
There's always a diagram printed on the drive or at least some sort of labeling so you can tell how the jumpers should be associated. Hard drives usually come preset as master, but that isn't always true.
Lastly, yes, I plan to make my old one a storage device, since I download alot. Does this mean I should download Windows XP onto my new HDD. i_am_a_newbie said that wasn't necessary, so what exactly the point of installing Windows XP on the new drive if you're keeping the old one?
Have you installed Windows XP before? It's a whole new bag of troubles. So if you're up to the challenge and you have what you need (A working Windows XP disc and drivers for your computer - or possibly a restore disc - and software install discs for the apps/games you would like to reinstall) then by all means give it a shot.
Benefits to installing XP on the new drive include increased performance of Windows and installed applications/games. It's really nice to have fresh install of Windows too, especially when you're using one that's been through the ringer. Drawbacks include quite a bit of time preparing (backing up your files, getting drivers etc...), installing and configuring (Settings, installing your drivers, apps and games etc...).
You could also 'clone' your existing install of XP to the new drive which would be less work, but might be more confusing for you and you'll lose that squeaky-clean feeling you can only get with a new XP install.
Either way, it's still a good learning XPerience.
Here's a random IDE install guide.
http://www.computerhope.com/issues/ch000413.htm