I shall be moving shortly and will have far less space for all the computer gear. I have a laptop with some data and programs on it but am wondering how to go about copying my entire hard drive from my desktop to the laptop. I know there is stuff out there, but am not sure where to start.

I am using XP on the desktop and Vista on the laptop.

I think the answer would be to invest in a removable hard drive. Even I managed to use mine without help and they are quite cheap now.You just plug it in and follow the instructions on the screen and it saves everything you ask it to
Then you plug it into the laptop. Mine is called a Buffalo ministation.
I hope TW and Leau agree.

There is a way to do it i am not sure how my mate did it for me, but he trasferred all my data from my old desktop to my new one by imaging and copying the hard drive.

One way is to use a USB-USB cable, which will connect both PCs.
e.g. the one on this page: http://www.hardwaresecrets.com/article/248

If you're adventurous, and are thinking of throwing the old pc away, pull out the hard drive and keep it, and use a HD-USB Adapter to retain access everything on the old HD:
e.g. http://insidecomputer.stores.yahoo.net/usb20235hadr.html

If I was to buy an external hard drive, how do I know how big the storage should be for my entire desktop content.

Most installations are less than 15 megabytes but you can find out how many megabytes yours is by going to 'My Computer', right-clicking on the (C:) drive icon and looking at the 'Properties'. You'll see a pie chart showing the amount of used disk space.

I have never needed to transfer the entire contents of of one computer's C:\ drive to another, so can't offer any advice based on experience. I understand it is possible to do but wonder if you might have difficulties with the Microsoft WPA and WGA servers thinking you've installed the OS on another computer. The OS is usually only licensed for the computer it was bought with. I know the OEM license does allow for a certain number of hardware changes before Microsoft will ask you to get in touch with them. Whether or not that happens might depend on just how different the hardware in the target computer is. As I say, I don't know for sure. You may or may not come up against that problem.

I wonder if it's really necessary to transfer the whole disk? You could just transfer your files to the new computer and reinstall any programs you want. Files can be transferred using a USB hard drive but a USB thumb drive might be good enough. There are some quite large capacity ones of those now. Big enough to transfer many files in one go. Could that be an option?

I never thought of permissions being refused and that would be a headache halfway through an entire installation. I guess it would be best just to pick and choose what I really need and reinstall programs. Do most companies let you install again on a laptop?

You wouldn't get the problem (if there was going to be one) during the transfer. It would happen when WGA checks in to see that the OS is installed on the same computer it was originally licensed to.

Some programs are licensed to only one installation. Others allow for it to be installed on any computer you own. Best to check the terms and conditions of the program, or even ask the question by emailing the company.

If you don't intend to use your Desktop computer and want to adhere strictly to the licence terms of the program, you could uninstall it and then install it on the laptop. However, if the Desktop computer is only going to be used as a doorstop from now on, I don't suppose it's going to matter that much in practice if you leave it installed. I wouldn't recommend passing the computer on, or selling it, with the programs loaded though.