External HD for primary in new system?

I am building my first PC. I am getting a new power source from recommendations here and waiting on 2GB of kingston DDR2 ram. Waiting to get my hands on an 8800GT GPU as well. I have an external hard drive I was hoping I could use. It is a western digital featured here.
http://www.storagereview.com/WD2500JB.sr

It is enclosed in a san max case shown here.
http://images.google.com/imgres?imgu...%3Den%26sa%3DN

I was wondering if I can install this as the primary HD in my new barebones system. I have pics of the inside of the enclosure. It is hard to see but I think it is soldered or something by the red,black, and yellow wires. Is all I would need a IDE cable? Can I use the fan? Could I also do a 2nd sata hard drive?

http://i123.photobucket.com/albums/o...t/IMG_1474.jpg
http://i123.photobucket.com/albums/o...t/IMG_1475.jpg

That drive will slide right into a standard 3 1/2" drive bay unless the enclosure fits into a 5 1/4" bay itself. The problem there is using a usb powered drive bay inside the case itself. Having good air flow like buying a HD cooler for internal use would be preferred.

The WD model is an ide model that can easily serve as the host OS drive if the board or for storage or even dual booting OSs.Presently Vista is running on the same model here while XP resides on a WD 500gb sata model.