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Hello haggisinlondon,
I run Linux both ways myself but I only install a distro on my spare HDD when I want to try it out. I like to try all kinds of software so that's what I use the spare drive for. If I like it, then I install it on the main drive.
My thought here is that your spare 2GB HDD is going to fill up fast with a Mandy install on the native partition and then the SWAP partition (depending on how big you make the SWAP). I think it is kinda up to you and what you feel comfortable with.
If you decide to put Linux on the main drive with XP, Mandy will do a fine job of using the unused space on that drive if that is what you choose but I would recommend that you create a separate partition for it. You will need Partition Magic or System Commander or some other partitioning tool to do this without loosing all your data.
I'm affraid I don't know how to answer the last part of your question because I have never installed Linux on two separate drives and then tried to boot from either drive. When I use my spare drive to play around, I just plug it in and unplug the other drive. I know this sounds kinda anal, but it eliminates the human error part. That way I don't screw up any data on my main drive. I'm sure there is a way to do that though.
Hope this helps,
freezinbutt
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