Windows XP will only work on the computer it was installed on, so moving the drive to different PC is not an option as far as running Windows XP is concerned, unless you have the means to install Windows XP on it again as a fresh installation.
You can certainly use the drive for extra storage though. There is no need to go into the BIOS or change the boot sequence. Just add the drive to your current Windows 7 rig, power up your rig and start Windows 7.
Then go to Control Panel > Computer Management > Disk Management
Right-click the ribbon which represents the XP drive and choose from the available options as appropriate.
For example, you can delete all the partitions on it one by one, then create one large, single partition (Create new simple volume), then format that volume. Job done.