"wonder if I can transfer the contents of my IDE hard drive including OS windows XP to the new sata drive."
Well - yes - sort of:-
Windows probably won't work, as it will have motherboard/etc drivers for your old system. That is "get roundable" - but:-
If your windows is an OEM version, the licence precludes you from transferring it from one system to another.
Of course, transferring your data is straightforward.
"I assume that I won`t be able to use my original DVD/CD drives."
Probably a wrong assumption - Most (all?) motherboards have one IDE channel, onto which you can attach two optical drive.
Also when setting up, you can temporarily attach you IDE hard-drive for copying "stuff" across, and importing your address books/emails/etc from.