I used to have a Ka and then Sportka and did it with mine, its quite easy.
To remove the old stereo:
On the stereo there are 4 little holes. You need some removal keys which you insert into the holes, squeeze them away from each other and pull the stereo out of the dashboard. The wires at the back just disconnect easily by squeezing the clips where they connect to the back of the stereo. Removal keys can be found on ebay http://www.ebay.co.uk/itm/Ford-KA-1996-ISO-Radio-Removal-Release-Keys-Stereo-Removing-Tools-/180883042000?pt=UK_In_Car_Technology&hash=item2a1d782ed0
New stereo;
It might be easier to buy one of the standard Ford Ka stereos as the Ka dashboard is a funny shape and the standard Ka stereos are designed to be an exact fit.
Go on ebay and search;
-"Ka 6000". this is just a standard KA cd player
OR
-"ka 6000aux" This is the newer model Ka cd player which has a hole at the front to connect your ipod/mp3 player etc. they are quite rare though
OR
-"ka 6006e" This is a Ka cd player which has a built in 6 disc CD changer in it. clever, but i had one and it was a bit temperamental.
Bear in mind they come in different colours as there are different colours of KA dashboard so you will probably want one that matches.
If you want an aftermarket radio then you can any one off ebay but you will also need a fascia adaptor which fits round the aftermarket stereo and is the shape of the Ka Dashboard and you will also need some wire adaptors. The following link for ebay is the removal keys, fascia adaptor and the wire adaptors all in one package:
http://www.ebay.co.uk/itm/FORD-KA-GREY-STEREO-FITTING-KIT-FACIA-FASCIA-ISO-LEAD-AERIAL-ADAPTOR-KEYS-/320763382543?pt=UK_CarsParts_Vehicles_CarParts_SM&hash=item4aaefccb0f
Hope this helps