Just specify your second hard drive as where you want to install Linux. When it installs your bootloader it will put it in the MBR of your first HDD no matter where you install linux.
As for which is better, I prefer grub, but lots (most?) of people like lilo. That sort of question can start flame wars...I like grub because you can change the configuration without having to reinstall it. You will just have to pick one and go with it.
Oh yeah, with grub you can choose from as many operating systems as you can fit on your disks, and lilo I believe (and I am sure someone will correct me
) is limited to 16. Probably more than enough for most people though...
Good luck.