The data on either drive will be accessible from XP or Win 7 but programs will only run from the OS they were installed in. You could run into some permissions issues accessing data but these should not be difficult to resolve.
I know how to dual boot, but I've never actually had a system that does it so two quick questions. If I boot from the Windows 7 drive will my XP drive also be recognized? Will I still be able to use programs and media and all my old files on that second operating system? And if I cant should I just install Windows 7 on the same on a different partition on the old drive?