Using two hard drives is better than using one and partitioning it. If your OS drive ever failed, you'd be losing both OSes instead of just one. Also, if your BIOS supports boot device selection via a key press... you can load one drive with Vista, then one with XP and use the BIOS boot menu instead of relying on Vista's bootloader.
Exactly. Much more sense than a one drive partition/dual boot IMO.
Not that most people need to keep an XP install at this time since Vista is working fine. But if you like to run older games and apps then you might be glad you have XP still.