You need something like this:
http://www.microcenter.com/single_product_results.phtml?product_id=0280775
I'm going to assume you have a Snow Leopard DVD. If not, write back and we'll tackle that separately. For now, though...
0) Write down what OS version you're using 10.6.what?
1) Replace the hard drive drive.
2) Restart with the OS DVD in the computer. When it launches the disk search the menus for 'Disk Utility' and erase the new hard drive with 'HFS+ Journaled' as the setting.
3) Install the OS on the new hard drive using the DVD.
4) Upgrade it to whatever OS version your old drive is using the internet. You know, 10.6.x - Whatever it was.
5) Plug the old drive into the dock and connect it to the Mac with USB.
6) Search spotlight for 'Migration Assistant' and follow the directions.
That's it!
Notes:
- If you don't have a snow leopard DVD, tell us what you do have and we'll figure something out.
- You can get a 1 TB drive for only $80 these days. Why not go for it? It takes a bit of work to open up an iMac, I'd hate for you to have to do it again next year if you run out of space again.
http://www.microcenter.com/single_product_results.phtml?product_id=0392471