1) Use Partition Magic to delete the partition and then establish a new partition the size of your HDD.
2) Use PM to create a small partition on the HDD, 500mb will do, and install BootMagic from the PM CD (it is not a default installation). BootMagic is a boot manager, which will run independent of Windows (that is why it is its own little partition), which you can use to manage your dual-boot setup.
3) Have your HDD's set on cable select, in the primary IDE controller, one in position 0 and one in position 1.
4) Install XP from your installation CD to the 0 HDD, reboot, and it should be assigned the drive letter C:. Repeat for the 1 HDD, reboot, and it should be assigned the drive letter D: (if it is available).
5) Through BootMagic, establish your boot preferences.
Note: Although I think it is preferable and has certain advantages, it is not an absolute necessity to use a third party boot manager, you can use WinXP to manage the dual-boot. If you eliminate everything I stated, above, concerning BootMagic, and install the two XP's as I have indicated, XP will manage the dual-boot and provide you with a boot choice screen which will appear right after the bios boot screen.