I ran WesternDigital DataLifeguard tools:
http://support.wdc.com/download/index.asp

and it let me copy the hard drive over to the smaller one.

The program is a bit confusing because there is a disk copy wizard but thats not what you want it only copys the files and dosent set it up as a bootable device. There is another drive setup wizard that copies the drive and makes it bootable.

Neather of my drives are WesternDigital but it did the whole process fine.

I did however have to repair office 2003 and reinstall a game on the new hard drive for some reason because they would not run afterwards but apart from that i think its a brill tool to use. AND ITS FREE!!