1.) The process is basically the same as with Windows XP or any other OS...create one partition on each physical drive and then install Vista on the one and the other OS on the other. I had problems installing Vista from scratch in a dual-boot, so I used my XP CD to create two partitions, installing XP on both. I then upgraded the secondary partition to Vista...process went smoothly. Note that which ever way you go, you should install the older version of Windows first, then Vsta to the other partition...problems can arise if Vista is the initial OS and you try to install an older version.

2.) No...that's not possible with Daemon Tools or any other DVD-ROM emulator I'm aware of.

Hope this helps,