First, let me say you could not simply copy-and-paste a copy of all files on drive #1 to drive #2 while drive #1 is in use (running Windows) because hundreds of files would be in use and unaccessible. Thus, you would need to boot either from a CD or a third hard drive and copy the contents over. It would be best to use cloning software, such as that usually provided at no charge by the hard drive manufacturer.
However, my question is what would you be trying to accomplish? Copying all of the files over would transfer any problems you have software-wise, so is this to abandon a failing hard drive or would it serve some other purpose? There may be a better way.
Let us know.
Is there a way?
If I backed up all information on a computer running on XP onto an empty/new hard drive (#2), and replaced my old hard drive (#1) with hard drive #2 (since there's room for only one hard drive in the case), would I be able to completely restore the data? Is there any other way to completely restore what was on hard drive #1 without the Windows XP installation CD?