Master and slave don't mean anything other than a way of identifying the drives - which is what setting the jumpers does. SCSI drives all have SCSI ID numbers...well, ATA drives also have to be identified, but since there are only two of them on any given IDE bus, there are only two options - Master or Slave or if you happen to look in your system profiler - 0 or 1. Think of it as the street address...nothing more.
Your existing drive (the Maxtor) will be set to "Master" because it's the only one in there. Therefore, the easiest thing to do is to set your WD drive to "slave". There should be a diagram on the drive which shows where the jumpers go. If not, see:
http://support.wdc.com/techinfo/general/jumpers.asp - you want Dual (Slave)
And no, you do not have to install 9 on this drive. I didn't put it on my 120GB WD (it is on my other drive) - just put a nice fresh install of Jaguar on it. Put the install disk in the drive, restart holding the C key and go first to Disk Utility and format and partition the drive as desired. Then install X.
You should also be able to format and partition the drive from your current drive - just use Disk Utility and select the new drive. Then either put the OS X install disk into the drive, click on it and run the Installer, at which point you will be prompted to restart, or just restart and start up again holding down the C key.