I have used this one before, I always go with western digital products. As for where you order it, both companies, OWC and Newegg are easy to deal with.
Yep, that'll work - and it's a decent price. Just keep in mind that 7200 rpm drives, while having faster access times, have a tendency to vibrate more and use up battery power slightly more than 5400 rpm drives. If all you do is browse the web or work in word processing, you might not need the speed (other than to shorten boot up times). But yeah... I think that drive is a good choice.
And one more thing. You might want to consider getting a cheap external housing for your current drive so that you can transfer the files back to the new one once it's installed, and then use it for portable storage.
That is a good choice. Like the above post mentioned, they do vibrate a bit more than the stock drives, but I have the 320GB version of the one you posted, and it really doesn't bother me. I haven't noticed much of a difference in battery life either. Overall, it's a really good drive, so I would recommend it as well.