Hawkeye22 is correct. If you have the XP drive in the system when you install 7 to a second drive, you will get a dual-boot menu.
However: The boot-loader and dual-boot menu will be on your XP drive. When the system boots, it will start from the XP drive and then, if you choose Win 7, transfer control to the other drive. You will not be able to boot from the Win7 drive at all if the XP drive is not present.
Many people are just fine with this situation.
The rest of us install Win7 with only the new disk in the machine and let the Win7 install format the partition for Win7. Then add the XP drive back to the machine.
Some of us stop here, picking which OS to boot in the BIOS. Choose which disk, choose which OS. The rest of us download EasyBCD and modify the Win7 boot process to offer the XP as an alternative, then boot off the new disk forever. If, Lord forbid, the Win7 drive fails, you can still boot the old XP disk.