With two physical drives, I recommend OSes and Apps on one, and data on the other. Format the data partition FAT32 for easy sharing between Windows/Linux.
A variation is Linux on ~15Gb partition on the new drive---and the data partition on the rest. When everything is working, you can copy Windows data to the new data partition, and then set up more shared data space on the first drive
If buying a new drive, get AT LEAST 80Gb
Before setting up dual boot, make sure you have your Windows install disk at hand. Sometimes, there is trouble and you may need to restore the Windows mbr. One way to avoid this risk is to start with the linux bootloader on a floppy. You can always put it on the first HD later.
I would mention BACKUP before starting any of this, but you already know that.....