1) You do not have to reinstall if you have an enclosure for the old drive and can attach it to a computer and use something like SuperDuper to clone the drive over. I recommend a fresh install, it just works better.

2) You can certainly purchase Leopard if the laptop meets the system requirements. If it originally came with Tiger you want to check carefully. You may need more RAM before it will allow it.

Have fun with it. : )