Wait a minute nickc, either I'm confused or you are confused. The way I see it is he has an old IDE hard drive, but no way to hook it up internally. So going IDE to SATA to IDE would be pointless.
Windows won't boot off a USB drive without you hacking some files and making a custom installation cd. Some linux distributions are able to boot off USB devices without a problem. The motherboard has to support booting from a USB device though.
If you want Linux on this and want it USB, make sure your motherboard will do it. If you want Linux on it and don't care if its internal, I'd recommend just picking up a cheap PCI IDE controller card then.
There is eSATA, but you'd need an eSATA external enclosure, and also probably a SATA HD, which you don't have.
eSATA = External
SATA = Internal
IDE = Internal
USB = External