New HDD, new OS...help

I have a Gygabite P35-DS3 S motherboard, with 4 SATA II connectors. I currently have a 400GB WD hard-drive, on which i'm running Windows XP. I would like to buy another hard-drive, and I'd like a 640GB / 1TB HDD (it seems stupid to pay 10-50$ less for ANOTHER 400GB).
On this new HDD, is it possible to partition it in 2 pieces (let's say 400 + 240) so that: my current XP will see 2 400 GB HDD's and to format the remaining 240GB to an EXT3 FS in order to install a Linux on it? I know this may sound stupid, but this configuration would really suit me best (so that I extend the capacity of my current XP File System - games, movies etc. and to run Linux 'cause I need it for my diploma project).

Another option would be to install the Linux on the whole 640GB (but that would mean no more torrents on Windows :) ). But how would this work (each time I open my computer, I would be asked in which OS I want to boot in?).

I don't want to create a EXT3 partition on my current HDD / use Virtualization software. Thanks a lot for any kind of help!
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  1. You will need to use some 3rd party software to be able to choose between OSes at boot up.

    Vista has this built in, but not XP as far as I know.

    There are several open source boot managers at sourceforge, or you can check your specific Linux distro boards for recommendations.
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