How to combine two working HD's into 1 computer

You can put both HD's in the PC and change the boot.ini in the root of the first to make it a multi-boot machine, offering everybody turning on the machine to choose one the two. You can't make it user-dependent, because the PC during boot doesn't know who turned it on, so there is no user yet.

It's much easier to have only one OS, and work with user accounts. After all, without folder/file restrictions, any user booting into the OS on drive 1 will have full access to all files on drive 2, so the whole operation has no use whatsoever. And, even more important, you would have to reinstall XP on the 'other' drive also, because seen from that drive, the motherboard and other hardware chances and that generally is handled correctly only by a new install.

But unless desktop space really is at a premium, wouldn't it be better to have 2 PC's so different members of the new combined household can use a PC at the same time?

Kees

This would not be permitted by the Windows EULA, and if those copies of Windows were loaded onto the drive at the factory, whichever drive is the transplant will then fail to work. Best case scenario is it will ask you to reactivate, but the key won't work because it is tied to the specific hardware of the other machine.

If one copy was a full retail version, then it would be possible. You'll want to wipe out all drivers before moving it, and then you'll almost certainly have to activate it again, but if it's a retail copy then it should be fine.

After that you get to reinstall all the drivers for the new hardware. That is your best case scenario, and it's an unlikely one at that. Plus, even assuming you get it all set up how you want, then everyone has to remember to reboot the computer when they are done, otherwise there's a chance of User A using the OS of User B and the other way around.

A much simpler solution would be just to keep the two computers, and wait it out until one or both need replacing. Then just get a single replacement computer. Or maybe consider getting tablets to handle a lot of the basic stuff like web browsing and email, then the computer proper is reserved for more demanding tasks. What you are wanting to do is just asking for trouble, so I would strongly suggest you consider alternate ideas.