It is unlikely that you computer will have more than one AGP slot so yes, you will have to remove your current card.
Have you thought this through thoroughly? Why do you want a different card? Will a new one be all that much of an improvement over the current to justify paying that amount of cash?
Altering and messing about with such fundamental parts of a working computer, such as the graphics card, can introduce all sorts of problems - including a non-working system.
I don't know a lot about current Compaq machines but I recall in the past that they sometimes used "unusual" components only replaceable by items bought from themselves. It may be the case here.
Do you feel confident in being able to do this? No disrespect but, your mere asking the questions you have asked prompts me to think that you may not be.
Personally, I'd put the money in my "New Computer Savings Pot" and carry on with what I have.