Downsizing to MBA?

So I upgraded to a 128GB MacBook Air from a late 2006 640GB Black MacBook. The downsizing has been too much for my brain to figure out. I would like to put the original 128GB HD back into the MB and use the 640GB HD in an enclosure as an external drive. I also have a 320GB Western Digital Desktop external that is being used to backup my MB. I have roughly 100 GB of Video and 100 GB of Music on my MB along with roughly 120GB of "stuff" from my transfer from windows machine, and junk that I've picked up over the last few years.

I want to keep the new MBA as clean as possible, and want to have all of my storage on an external drive. I want to eventually go iTunes match, and set up an external to hold my library rather than having music on the MBA.

Should I erase the 320GB WD external, move all of my videos, music, pictures to that, then clone the 640GB drive to the original 128GB drive, swap them, and then reformat the 640GB and partition it to backup the MB and MBA, and then transfer all of the docs from the 320?

I am by no means "tech savvy." I can replace ram and switch out hard drives. Has anyone else had similar experiences downsizing? Let me know. I also went out and bought a 1TB WD my passport for mac just in case. It was on sale, and I would take it back if I don't need it. Thanks in advance.