You can clone XP using free Macrium Reflect or copy using free Partition Wizard bootable CD
to another HD into unallocated space of slightly larger size, however you must run an XP repair install before it will start up. You do this by booting the XP CD, proceeding as if to install until it discovers the XP partition to repair, then select "R" for repair (not the first "R" for repair choice).
This will reset all drivers and activation so you can reactivate using your retail product key. It will not work with an OEM factory-installed XP license except on same machine - only a retail key.
It will also start XP to the exclusion of Windows 7, until you mark Windows 7 active in XP Disk Management, then boot the Windows 7 DVD to run Startup Repair repeatedly until Windows 7 starts.
If there is no Dual Boot Menu at this point, you need to install EasyBCD 2.0 beta
in Windows 7 to Add XP on the Add/Remove tab.
Not easy, almost daunting, but doable and slightly easier than reinstalling XP which also requires adding to the Windows 7 boot menu using EasyBCD 2.0.