You should be able to just Windows 7 with no problems.
Of course, having a practical backup plan is a good idea.
Another option is to
disable the first drive. You can do that in the BIOS or just remove the power and data plugs. Windows 7 will then install on the second drive, but naming it C: for Windows n7.
Once you have Windows 7 up and running. you can hook up the first drive again . (After turning off the power, of course.) Or reboot select which of the two drives to start form the BIOS boot menu. This may seem rather odd, but it is the most
conservative way to have two OS's on one computer. No need for and boot manager software. Let the BIOS do it all. That is way they made it.
With Windows XP it does not matter if Windows 7 claims to be on C: when it is not. The terms C: D: E: are not the real physical address of the drives. Therefore it helps to put labels on the drives to tell them apart.
Example:
SATA1 partition 1 label "WIN XP PRO 32"
SATA2 partition 1 label "Win 7 Pro 64"
That is my best commendation. Personally, I have and use both Windows XP and Windows 7 on my personal computers at home.
Here is a reference:
http://forums.cnet.com/7723-12546_102-264088/dual-boot-vista-and-xp-two-different-hard-drives/
