Installing new hard drive

G5 single processor
running Leopard

Hey guys, I have a question about installing a new hard drive. The original drive was starting to make some funny noises and didn't always start up on the first try, so I bought an external hard drive and did a full backup which was successful. I then went to the local computer store and bought a new 320 GB drive. Here is my question, after I install the new hard drive and I begin to install the OSX operating system, do I leave the external drive connected, or do I do a clean install of Leopard on the new drive and then connect the external to transfer existing files, etc. Any help would be much appreciated. I have basic computer skills, but I don't work on these things all the time. I just love Macs. Thanks for your help.

Thanks for responding so quickly. I love this website for that. The external hard drive is by WD, a one terabyte My Book for Mac and it just has a simple USB connection.

Okay, I installed the new hard drive, plugged in the external hard drive and restarted the computer with the OSX installation disc in the tray. The window to start the installation comes up and it asks, "where do you want to install the operating system?" It shows only the external drive. The new hard drive is not shown. I can open Disc Utilites from the menu at the top and it shows the new hard drive and the external. It just doesn't show on the install screen. What am I doing wrong?

Any help would be greatly appreciated.