If you want the XP drive totally independent, so that you could remove it at a later time without effecting W7, then disconnect it when installing W7 after the instalation is complete, you can reconnect it.
You can go into bios and select whichever drive you want to boot as the first boot device, save settings and exit then restart. This can be a pain if you are changing regularly from one to the other.
If you want to be able to choose at startup from a menu, then boot the W7 disk choose custom install and choose your sata drive as the destination drive, when finished Windows will make a boot menu to choose Windows 7 or Old version of Windows at bootup.
If you are using an upgrade version you will need to do it this way anyway (with XP drive visable).
Do not change the jumpers on the the old IDE drive, there is no master slave on sata drives.
I suggest the second option would be best for you