First of all, here is my usual reference:
According to the GRUB manual, this is a Stage 1 error:
As far as I understand, that means is that it doesn't matter what's in your grub.conf file, because it's not even being found by GRUB's stage 1. Grub's stage one is likely what you mean by "I have copied the linux boot sector over to the C: drive."
It seems to me that this statement from the first link above is relevant:
If you have multiple hard drives (disks), /boot must be on the same hard drive (probably the first hard drive) that has the Windows boot loader (NTLDR) on the MBR.
That means that if your /boot is on sdb, then the NTLDR might not be finding it. It is quite possible to install /boot on a small partition on sda and still have the rest of FC5 on sdb.
The easiest solution probably involves reconsidering GRUB as your bootloader. It's more than capable of booting Windows, I think Windows just needs to be installed on a primary partition. If you do replace NTLDR with GRUB though, in order to be able to reinstall the NTLDR easily, simply backup your MBR and then you can restore it as if nothing happened. Google the three words backup mbr linux and you'll get plenty of ideas how to do this.
Here are some tools you'll likely find useful:
(you can also use the dd command to backup the MBR)