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Solved by Quaker,
There's really no specific need to wipe the hard drives, particularly the 300Gig external.
But, yes, the best way to do it, so as to get the most usable drive space would be to back up anything you want to the external drive and format the 500Gig HDD. Then remove the 500Gig HDD and install the SSD. Install Windows on the SSD and then re-install the 500Gig HDD. (This helps to avoid any problems the Windows installer may have with trying to install to the wrong drive).
Edit - or more exactly - Remove the HDD. Install the SSD. Install Windows on the SSD. Re-install the HDD; back up the stuff you want; format the HDD. (Make sure that your BIOS is set to boot from the SSD)

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