Im a total noob, but i just was wondering if i got another HD and installed the same copy of xp that is on my old HD (version that came with comp) can i choose to boot up with the new HD? If so can i take the files i want to keep from the old HD and transfer them to the new HD and then format old HD and make the old HD an extra storage place or something.

I am wanting to do this cause my comp is slowing down and there is a lot of crap that i want to get rid of and i need more space anyway. But i want to put xp on the new HD first and make sure i did it right before i delete xp from the old one and use it a storage. If i can use it like that.

You sure can. There is one thing you'll need to do though, and that is specify your new drive as the first bootable hard drive in your system in the BIOS/CMOS configuration.

You should also disconnect your old hard drive FIRST, install your second drive, reinstall Windows on your new hard drive and then after your first successful Windows boot, plug your old hard drive back in. This will ensure your new drive ends up being C: and not some other letter, such as E... which could cause some issues.

You should consider an external USB enclosure for your old hard drive. They can be very useful.

Can i copy files from the old hard drive to the new one?

yes you can. It's called "cloning" a hard disk. Any cloning software will make an EXACT copy of your old hd to your new one. They also allow you to proportion partitions if need be.