1. Can I simply add the new drive without changing the bios?
Yes. This has nothing to do with your bios.
2. Does it need formatted?
Yes. This will take a bit of time, but isn't hard to do.
3: What software is required to format? I'm a bit hazy about partitions.
You can do this in windows.
4. How can I be sure I'm not overloading the power supply?
This one is hard to say; we would need more details about your setup, otherwise it would just be seeing if there are any problems when you hook it up.
5. How does one proceed if they want to copy the original drive to the new one?
See the post above.
6. I have read about an external drive. Can one boot from and external drive?
I think so, but it strikes me as a really bad idea.
7. Can a HD be connected to a USB port.
Yes; you would need a connector; most people use a hard drive enclosure for this.
If you are putting it inside your computer, it will be connected either with SATA or PATA. If your old hdd is connected to your computer with a ribbon about two inches wide, it's PATA, otherwise it is SATA.