Hi Phil,
Sounds like a good deal - I hope you have fun with it!
There is a way to copy the OS directly to another disk. All you'll have to do is to install another IDE drive as a slave, and then partition with HDTools (in the Tools directory of the system drive), then format it using the menu command. Then, select "Show all files" with the system disk open, and select everything and drag it to the other drive's window. It's not too hard - oh, and make sure that when you partition, make the new system partition bootable.
I'm sure that there maybe smoother ways of doing this - so if anyone has a better idea go with it!
Re: the CdRom. You'll have to install ASIM-CDFS or some other file system. It don't think that it will ever show up in your boot menu. The other trick is finding a CDROM drive that will work - seems like most will, but there are definitely some that won't.
I don't think that A1200 3.1 ROMs are the same as A4000 ROMs. I'm not sure though.
Hope this helps!