I'm in the process of doing something similiar. I have two 250 gig serial ATA drives. I had been using one for storage only. I am now planning to leave XP on my C Drive and install Vista on my D drive.
In order to be able to do this, you will have to go into your motherboard bios and change the boot order. Which ever drive is looked at first will govern whether you boot up in XP or Vista.
I have decided to do this rather than a dual boot as I will eventually want to use Vista only and if you set up a dual boot, you are stuck with that until you reinstall again to get ride of that setup. By installing Vista on a seperate hard drive and using bios to select the boot order, I can eventually use the drive that XP currently resides on as my storage drive.
For me, it's easier than that. I don't touch the boot order and I have 2 hard disks. My Sata has XP installed as always. When I installed Vista, I unplugged my Sata HD and plugged another. Here comes the tricky part:
After installing Vista it obviously will put itself as C because that's the only disk that was there during install. When I plug my XP hard disk again, it automatically gets recognized and the letter D is assigned to it. When I want to go XP again I simply unplug the Vista drive and voilá, my Xp disk is now primary and boots as C.
You can do it easier though: You can use your 2 hard disks as C without the hassle of plugging or unplugging anything. Do this:
-Unplug your XP hd.
-Install Vista in another HD.
-After Vista is installed you can plug your HD and define which one will boot in BIOS. No more plug/unplug anything and each OS will be its own C:
Conveniently, some BIOS like Asus' have a boot menu that let's you choose which disk will boot when you start the machine. You can set your boot disk to the one you'll use the most and press F8 (in asus bioses) when you want to use the secondary OS. The boot order will not be changed so you need to press F8 each time you want to the secondary OS.
Oh, my... Hope this post wasn't too confusing. You can ask me anything that you didn't understand. BTW, english is not my native language so bear with me. I accept corrections though.
You don't actually have to unplug your drives unless you want to avoid making a mistake during installation. As long as the drive you want to install Vista on is first in the BIOS boot order, then Vista will put its bootloader there.
I was doing the F8/switch boot drive thing for a while too, but I figured out how to boot both without touching my XP drive....See my guide here.
It's a little complicated, but this way you won't have the Vista bootloader on your XP drive and you won't need to change BIOS boot options.
BTW, if you do allow the bootloader on your XP drive, it will create some files which are very hard to delete - the hidden boot folder takes up like 30 megs and I had a very hard time setting permissions in Vista so I could delete them. They couldn't be touched in XP....