If I understand your situation, you have 2 hard drives and I will assume for now they are SATA. One has a good install of Windows 7 and you want to install XP on the second drive and do a dual boot.
You do not want to install XP after Windows 7 since it will probably mess up the MBR. If I were you, I would unplug the Win 7 drive and just install XP normally. Then boot back into Windows 7, and the OS that boots will be the drive listed first in the bios.
You could then download EasyBCD and add the XP install to the boot menu. Just make sure you know what drive letter the XP install is when both drives are connected.