RE: Upgrade XPS 8500 Desktop - from HDD to SSD
Your plan sounds fine to me. Check the Wiki articles, where I've got one on how I installed my SSD in my XPS 8100 case.
As for your specific questions:
a) A regular SATA data cable is all you need. You'll want to connect the SSD to port 0. After that, it makes no difference where you plug your drives in. Installing Win 7 will designate this as the primary drive. There's nothing in the BIOS to set.
b) Nothing to do but plug it in.
c) The ports are labeled, so it should not be too hard to figure out. You can leave your Win 7 installation on the drive untouched if you prefer. Unless the HDD is set as a bootable drive in the BIOS, it will be ignored as a boot device.
My personal preference is to plug in just the system drive, install the OS, then add other drives later. I do this so I don't accidentally install the OS onto the wrong drive. (Yes, I've done it.)