UDMA (Ultra Direct Memory Access) describes the way in which the drive interfaces with the rest of your PC. The numbers at the end refer to the theoretical limit on the amount of data (in Megabytes) that can be transferred every second. In order to take advantage of the higher data rates, your motherboard must be able to support the higher standard. If you put a UDMA133 drive in a motherboard that supports upto 66, your throughput will be limited to the theoretical limit of 66.
SATA uses a different interface and the current standard is 150Mbps. You'll notice that this is higher than than the fastest UDMA standard. However, in practice, fast IDE (UDMA) drives perform on a par with SATA drives. Recent SATA drives are however starting to shine, and providing your motherboard supports it (unlikely on an old machine), I'd upgrade to that. I just like the smaller connectors
Go with an 8MB cache.
A seperate boot drive keeps your OS data seperate from your video. This serves a few purposes:
1) disk maintainance - it's easier to keep your video drive defraged and running smothly
2) reduces seek time if OS dependant apps are running in the background
Essentially it helps ensure no droped frames.