Stealth, your proposed method does indeed work. I have followed it before, with good results, as have a number of other people. In fact, when I decide to set up dual booting and HD install again, I will definitely do so using that method. See this thread for what I basically did.
http://www.knoppix.net/forum/viewtop...?p=19455#19455

But stuart_b's idea is very good also, and does offer some advantages, not the least of which is having clean installs of both OSes on one drive, with data on the other. In my case, I bought a ready-built PC which had everything preinstalled, but no XP disk. It has a partition to recover everything back to factory defaults, but it will probably take me days just to reinstall all the XP patches!!! Not to mention nuking out the adware and stupidware, and then all the apps will be reinstalled and registered on the original disk - Caramba!! Believe me, if I had all original disks for XP and the apps that I want, I would probably follow stuart_b's suggestion. But I don't and I won't.

JD