[G4] novice questions for external drive

[hec]

hello,

i have a 867 dp mdd using os 10.3.7 and just got a maxtor 120gb 
external drive.  this is the first time i have had more that one 
drive and am not sure of the steps to set it up.  for now it will be 
for back up, but i do want to be able to use my applications too.

do i need to format the drive first?  if so, what is the best method? 
disk utility does not seem to have that function.  a little while ago 
members of the list were discussing difficulties of cloning the 
existing os onto another drive and have that drive boot up.  after 
the formatting and getting the os on and working what is the best way 
to transfer my files, applications etc (about 14gb)?

thank for your patience with all my questions.

best to all in this new year.
hec