You'll never miss the original 200 megabytes. If you've filled up a newer, larger drive, you won't want to give up that capacity, so it's better to add a new one. If you do replace an existing disk, you'll have to make arrangements to transfer the contents of your old disk to the new one. If you don't have a tape backup unit, this can be a tedious and time-consuming process. Get the biggest drive you can afford.
Hard disks are like closets.
You'll always fill them up, no matter how large they are. Figure on a two-gigabyte drive at the minimum. To add or replace a drive, you have to know what kind of drive controller your computer uses. On a PC, you're most likely to have an IDE or EIDE drive. If you have a Macintosh, you'll need a drive designed for an SCSI controller.