I have just bought a new sata hard drive for my daughters PC because her old IDE drive is failing.

She has Windows 8 Pro from and upgrade we downloaded from Microsoft.

I don't want to run into problems, so just want to be sure. I'll have to re-install Windows 7 then use the Windows 8 upgrade.Correct?

Do I have to do anything to de-activate the first Windows 8 install, or can I just continue to activate on the new hdd? Also, is there any way I can avoid this just by copying everything from the old drive to the new one?

You refer to the new drive as sata (Serial Advanced Technology Attachment) and the old as IDE (Integrated Drive Electronics). If the old drive is one that connects with a ribbon cable and by parallel signaling, the first thing is to be sure that the computer has a serial connector to which it will connect.

If that is OK, you can find software on the new disk maker's web site that can be used to copy the old drive to the new. (If the old can be reliably read long enough to do that. Then you can connect the new drive. Next, you would enter the computer's BIOS setup settings and set the new drive to be the boot drive. It is possible that a phone-in activation will be needed. However, if just the drive is changed, activation requirement might not be triggered.

On the other hand, if you remove the old drive, install the new drive, adjust BIOS settings and then install the OS from Windows 7 DVD, then Windows 8 DVD upgrade, a phone-in activation will be necessary. Just call the phone number for you region and stay on the line for a human or humanoid.