This subject was just recently covered. The only way you can connect two drives to an iMac is to use an external (USB/Firewire) drive. I believe the iMac DV SE came with two Firewire ports. With the new drive inside a Firewire enclosure, see OtherWorldComputing.com, AND if you are using OS 9.x.x, it is a simply matter to initialize the new drive and then drag the entire contents of the old drive, to the new one. However, if you are using OS X (any flavor), this cannot be done without the aid of a program called Carbon Copy Cloner. You make a clone of your old drive, on the new drive, and after you have removed the old drive from the iMac and installed the new one, it should all be just the same. You could leave the old drive in the iMac but if it is failing it may cause problems as it slides down the slippery slope to HD heaven.
Take no notice of Bob, he obviously hasn't had his coffee yet