Answer to: Installing SSD in iMac Mid 2007I used the Newer Tech AdaptaDrive 3.5"–2.5" adapter and it worked flawlessly for mounting the much smaller Samsung SSD into my early 2008 iMac's drive mount.
Answer to: Replace HHD with SSD driveI believe the old style drive temperature sensor is available for purchase from various sites around the web. I have an early 2008 iMac that has the old style sensor, so I didn't have to deal with this particular issue. However, if you can solve the temperature sensor issue, I found that mounting a 2.5" SSD into the iMac with the Newer Tech AdaptaDrive 3.5"–2.5" adapter worked flawlessly.
Answer to: 2.5 SSD or 3.5 SSD?I used a Newer Tech AdaptaDrive 3.5"–2.5" adapter to mount a 2.5" SSD in my early 2008 iMac. It worked flawlessly.