What you should do is make sure that the "large" new drive does not contain
any personal files. If it does move them onto the smaller drive. (you can
compress the drive to add more space)
Then you can format and install XP on the large drive and still access
"your" files from the small drive. This is a good way to work... keeping
"your" files on a 1 drive and the the Operating System(OS), XP&Office etc on
another drive.
However you should always backup "your" files to another medium like a CD.
IMPORTANT: "your" emails and contacts are all constained within the OS
files, you should export (copy) your Outlook data files before going any
further. The same is true of "My documents" and "Favourites" You may also
loose dictionary settings and custom settings.
Tell me a bit more: What OS are you currently using? What drive is it on?
How big is the new drive, what speed is your CPU....... These arent daft
questions, XP uses far too much CPU power, and youl need a decent 20Gb+
drive (fast preferably) at least 256mb Ram, and a CPU of 1000Mhz+