1- Will this HDD (
http://www.scan.co.uk/Products/Produ...oductID=529060) be compatible with my sata I motherboard (Asus A8V Deluxe)?
Yes, SATA I and SATA II (SATA300) are backwards compatible
2- Does 320GB provide the best 'bang for buck' out there at the moment?
Depends on you personal views really, look at the price of them compared to other 200GB-750GB drives and you'll work out what is best.
2- My PC will no longer let me watch videos in full screen mode. I have tried reinstalling WMP11 as well as trying other media players out. I am on the latest drivers and it is a 6800GT graphics card at stock clock.
I'd have thought that this is due to the latest drivers, sometimes updating drivers messes the computer around and you lose some functionality, I doubt that the card it'self is damaged as you haven't OC'ed it.