This guide makes it easy.
http://digiex.net/guides-reviews/console-guides/xbox-360-guides/3152-xbox-360-how-hack-250gb-sata-drive-work-xbox-360-xbox-360-slim.html
I'll probably do it when I find a deal on the WD Scorpio Black drive.
This knock off drive works pretty well if you don't want to mess with anything and it's cheaper than Woot.
http://www.dealextreme.com/details.dx/sku.46748~r.53733725
I didn't pull the trigger on this because I'm sure the drive inside is 5400 RPM even though I can't really find any info on it.