No you don't, you insert a flash drive to your Xbox move what items you want to the flash drive. After you done that install the new hard drive and then you can move what you have on the flash drive to the hard drive.
If its the one from haussbell, no. You have to buy the $60 from the Microsoft seller for it to work with original Xbox games. Anything but the specific Microsoft brand will not play original Xbox games.
I'm not sure, he don't have that game, but we have been having issues with our XBOX live. He can't play online and hasn't been able to in a week. The hard drive does work. I had to figure it out. But it works.