What's the best replacement hard drive to install in my MacBook?

Hi Cara,

The issue is the physical size of the drive you are installing. As long as you have the correctly sized drive (physically) and the drive is able to interface correctly with the systems SATA I (1.5Gb/s) interface the OS (OS X 10.7.x Lion being the newest you can use) can support a larger drive. Here's a good Apple TN on the OS's limit: Mac OS X: Mac OS Extended format (HFS Plus) volume and file limits. I doubt you'll hit these limits ;-}

As to the drive you do have an issue here as your system has the very first HD SATA spec (SATA I). So you will need to be careful on what drive you get. Make sure it is able to run at the SATA I (1.5 Gb/s) I/O speed. Seagate makes a SSHD hybrid drive that should be just fine here Seagate Laptop SSHD Drives.

But before you do anything make sure your system is running the latest firmware. Follow this Apple TN on how to check it and update it if needed: EFI & SMC firmware updates for Intel-based Macs. Lastly, you may want to get a FireWire (400) case to house your current 2.5" HD so you can transfer your files and have a backup drive (just in case).