Just for future reference, you can always go back and edit your post.
But on to the topic at hand... yes, installing and booting from your newer hard drive with the 8 MB buffer is probably a good idea. The hard drive your MDD came with is 7200 RPM, but it probably only has a 2 MB buffer. Maybe it won't make a huge difference, but every little bit helps.
Anyway, I would suggest connecting the 200 GB hard drive to the main ATA/100 bus. Connect your older 80 GB to the secondary ATA/66 bus. If both hard drives are connected to the same ATA cable, they will run much more slowly. When both hard drives are installed, I'd say install OS X onto the 200 GB drive, then just drag stuff over to the 200 GB hard drive. Once you've moved everything you might want, you can erase the 80 GB. If you don't erase it, there will be a lot of wasted space since OS X would still be installed on it.