Yup, an 2.5" SATA hard drive will work and it's easy to replace them, but as said, all your data will be gone. Try removing it and putting it back in first.
The PS3 is picky in the fact that if you remove your HD, put in a different one, then put your original back in, the original needs to be formatted and you loose your data anyways. As soon as a HD is in, that gets registered as the current HD.