You will need to run a Repair Install before XP will start up on new hardware. Repair Windows XP - How to Perform a Repair Installation of Windows XP - Part 1 of 2
The cleanest way to Dual Boot with OS's on separate HD's is to use the BIOS: set the preferred HD as first HD to boot in BIOS setup, then if you want to boot the other HD tap the key given on first boot screen for Boot Menu to trigger it instead. This keeps the HD's independent to come and go as you please.
In order to accomplish this, unplug the Windows 7 HD before running the XP Repair install, set XP HD as first to boot in BIOS, after DVD drive. After Repair, plug Windows 7 HD back in and attempt to start it up by using the key given on first boot screen for one-time BIOS boot menu.
If you decide you want a Windows-managed Dual Boot instead, install EasyBCD 2.0 beta to XP after first installing Net Framework 2.0 so it will run. Then Add Windows 7 on Add/Remove tab. Sometimes you'll need to start up Windows 7 first to run EasyBCD from there since it works better. To do this, mark Windows 7 active in XP Disk Mgmt, boot the Windows 7 DVD Repair console or Repair CD, click through to Recov Tools list to run Startup Repair up to 3 separate times with reboots until 7 starts.