First: is the OLD hard drive an IDE connected drive or SATA also? There could be some additional precautions to take if this is so, but we can cover that later.
You can connect the new SATA drive while the old drive is still connected. Boot into windows (from the old drive) and you can do all your prep of the new drive from within Windows using the Disk Management tool. Create your partition(s), format it (them) NTFS, and for the partition that will eventually be C: you can "mark it as Active".
Now, without restarting or shutting down, Install your image onto that first, active, partition on the new hard drive. A disk image is a sector by sector "snapshot" of everything on the partition that is imaged.
Now shut down the computer, disconnect the old drive, leave the new drive connected, and restart. If you have done everything right you will boot into Windows as if nothing happened as diehrd said.
But please review that tutorial beforehand. It covers a lot of this in much more detail.
If the image does not work, you can always disconnect the new hard drive and reconnect the old and try again.