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There is a free premium WD Acronis free cloning app that you can use to clone the Win7 partition to a space you create at the beginning of your second HD. Or if you're not happy with the Win7 install you can Clean Reinstall - Factory OEM Windows 7 there.
On the WD app's downloads page there is a Manual to download to read how to do an Automatic cloning in section 15.3.1
THis video shows how to shrink a partition after deleing the OEM partition (not needed) on the other HD: Partition Wizard Move/Resize Partition Video Help.
Once it's cloned over or reinstalled and starts up and runs fine, you can move the Active flag back to XP to start it up, then delete the Win7 partition on the XP HD.
This way there is no Windows Boot menu. You either let Win7 start up by default, or you tap the Fkey for Boot menu to trigger XP instead.