You'd want one large enough for your OS, paging file and programs to benefit most from the increased speeds.
Then follow these steps to Clean Reinstall - Factory OEM Windows 7
which steps are the same for retail.
You can then link your User folders from the HD by rightclicking each in the new Windows 7 to add to the related Library - Include a Folder - Windows 7 Forums
But you'd want to copy them off of the old Windows 7 first to delete and reformat partition which is the proper way to uninstall the old OS.