You should have no problems in buying a new hard drive. If your motherboard can recognize the 25 GB hdd, then it should not be a problem when purchasing a newer drive. ATA 133/100 are backwards compatible with older motherboards, so don't worry about that aspect.
One thing to note is that if your computer is still running windows 98, it will only recognize up to a 70 GB partition.
for transfer of operating system, you can use a backup program, such as Norton Ghost version 9, which can be found on the Norton system works 2003 CD (can be had on ebay for under $15). Make an image of the OS drive, and then transfer that image onto your new drive.