Yes, you can have both. Vista will want to start by default though, not XP. So when you boot your machine, you'll need to go into the Boot Menu.....depending on your mobo, you might have to hit Del, F12, or something similar. When you're in the boot menu, just select the hard drive that has XP and hit Enter. That's all it takes. And when you want Vista, just reboot and Vista should start by default. If not, then go into the Boot Menu and select the hard drive with Vista and hit Enter. That's it.
Now, installing the hard drive is another story. It entirely depends on whether you have 2 SATA drives, 2 IDE drives, or 1 of each. If both SATA, then just connect the SATA cables to the SATA ports in the mobo (check your mobo manual for location if you're unsure) and that's it. Just connect the power cables too and you're done.
If you have an IDE hard drive(s), then you need to make sure the jumpers at the rear are configured to Master/Slave properly and connect the cable to each drive properly. Each manufacturer's drive jumpers are different, so if you have an IDE, then check the manufacturer's website for jumper configuration. Then connect the power cables and that *should* be it. You *might* need to configure the BIOS to recognize IDE, but that depends on which mobo you have. Likely not though.
Hope that helps.