I was going to suggest the same setup as I almost always set my servers up that way. I like the separation.
Once you answer the questions raised by @Wayne-Workman then you can actually proceed with the rebuild. It sounds like you have a physical server from your description, does it have just a single nic or multiple? Also make sure you have the IP of the server and/or name of the server. The clients will need it to stay the same, unless you want to updated with GP and new config file. On the legacy clients it is trivial to update the config file with GP if you choose to change IP’s or names.
Also given that you are rebuilding the server this may be a time to weigh the Pros and Cons of upgrading to trunk as it is rather stable and offers many new features.
I would run the back up script and also do the export as @Wayne-Workman mentioned and save all of this to an external location either usb HDD or network location. I would also include the .fogsettings file, usually in /opt/fog/ for Ubuntu, as it has the original install settings stored in it. As long as you want it back to how it worked on install this could save sometime.
** A side note that may help, backing up your fstab file under /etc/ maybe wise also as it most likely will have the mounting point for /dev/sdb1 as the /images dir. (If the second HDD is auto mounted as /images as you have indicated). I will often unplug the second drive as to ensure it will not overwrite any thing during OS re-install(saving time on coping images back). I have had bad experiences in the past on this.
Then I would reinstall your OS and if you are staying with 1.2 then definitely use 12.04. But if you choose to upgrade to trunk then 14.04 or higher maybe a better choice. Then set you IP if it is static on the server. Proceed with the reinstall of FOG, you can copy the .fogsettings file from backup to the install location, usually /opt/fog/ if I recall correctly. After it is set up and database is configured then you can restore the database from the web gui. You can copy the “snap in” back up directory to the “/opt/fog/snap in” directory. If you chose to back up your fstab file then restore that to /etc/ (make sure to backup the original fstab in case there is a conflict), shutdown the server, plug in the second drive and reboot. If all goes well FOG should be installed and images there and ready for deployment.
@Wayne-Workman if I am missing something please chime in, I think that pretty well covers it though.