Here's what you need to do:
First, get one of these:
http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias=aps&field-keywords=usb+sata+dock&x=0&y=0
(many items shown, they all work the same, pick one you like that's cheap)
A USB/SATA dock will become a _very_ handy piece of hardware to have around, and did I mention that they were _cheap_?
Next, download the _free_ "CarbonCopyCloner" from:
http://www.bombich.com
It's one of the best pieces of Mac software "out there".
Then, do this (in the order presented):
1. Put the new, "bare" drive into the dock, connect the dock to the Mac, turn it on.
2. The drive will need to be initialized, so launch Disk Utility, "aim it" at the docked drive, and set it up the way you want.
3. Quit Disk Utility and launch CarbonCopyCloner. Then set it up to do a "full clone" of your old internal drive to the docked drive. It will probably take a few minutes to copy everything over.
4. Next, TEST the newly-cloned drive by booting from it:
- Choose to restart the Mac
- As soon as you hear the startup sound, hold down the option key and KEEP HOLDING IT DOWN
- In a few moments, the Startup Manager will appear
- Click the docked drive to select it, then hit the return key -- the Mac should now boot from the cloned drive in the dock.
- When you get to the Finder, check around to BE SURE that it "looks as you want it" (i.e., that it is indeed a cloned copy of the original).
5. Once you've tested the drive, only then is it time to "do the swap".
When you get the drives swapped out, you can keep using the dock with the old drive. You can use CCC to "incrementally update" the NEW internal drive onto the old original. Thus the old drive now becomes your backup.
I suggest that you keep the old drive _as_ a backup. It is ALWAYS a good idea to have a second, bootable drive "at hand" for an emergency. A Time Machine backup is useless in this regard, because you can't boot from it.
A bootable drive, even if the backup isn't "completely current", is (in my opinion only) worth 'way more than is a TM backup that you can't access in a "moment of extreme need".
Edit: I believe that the current version of CCC now has a "block copy option" (or something to that effect) that will now clone the Recovery Partition as well. If that doesn't work, you can also use the utility that Apple created (available at their download site) that will also create a Recovery partition on a drive that doesn't have one.
However, with a second, cloned backup, the entire notion of a Recovery partition is rendered moot. What better "recovery option" is there than a complete clone of your old drive?