How can I restore my system, using Snow Leopard, after hard-drive replacement?

So, to summarise, if I understand correctly, you have:

  • old 500GB drive in an external case, with good data
  • new 1TB installed internally, with bad data

I would do the following:

  1. Plug in the external 500GB drive.
  2. Hold the option (alt) key whilst turning on the Mac, then choose to boot from the external drive.
  3. Erase the internal drive using Disk Utility.
  4. Copy the contents of the external drive to the internal. This can be done using the Restore pane in Disk Utility, or alternatively Carbon Copy Cloner or SuperDuper!. SuperDuper is perhaps the easiest to use here.