I put a 200gig hdd in place of the ZipDrive.
No cutting, no nothing. Pop out the Zip, pop in the hdd and hook up the connections. Not hard at all. You won't get the full 200 gig unless you come up with drivers for the larger drive. Sawtooth will only recognize the first 128 gigs, unless you use some thing like this:
http://www.speedtools.com/ATA6.html
Oh yeah, use a 3.5" drive. Stick the 5.25" down at the bottom of the case in one of the spaces provided for it.