Yes, I've tried this before, too, and XP is keyed to install on the C Drive. The only way I've found to get around that is to physically remove your current C Drive (making your current D Drive the C), install Windows, then change around whatever you'd like to. In this case, you could just swap the new drive for the old so you've already got your C/D in the big drive and E in the small drive and you can swap things around right away after you've installed. Good luck!   [edit]:  Yeah, exactly what you're thinking. ;-)  If you swap the drives before you install, you can just leave it like that and you won't have to add the new drive later.
I have a Dimension 4700 and the HDD that came with it is too small for my current needs.  So, I purchased a 500gb secondary HDD and installed it.  I partitioned it into two 250gb drives and would like to install my Windows XP on one of the two partitions and then switch all of my current stuff from the original HDD to the new OS and then eventually format the original drive and just use it for extra space.  The problem that I am having is when I boot with the Windows XP CD and it asks me where I want to install the only option it is giving me is to either repair my current install or wipe it clean and start over.  I don't want to do either of those so I have to F3 and quit.  How can I get it to recognize my other HDD so I can install XP there? Thanks, Robert
Installing Windows XP on 2nd HDD