See pbharris' response in
this thread for instrucions on setting up Win2k to boot Linux.
As for installing to the second drive:
1. You don't need to worry about the 1024 cylinder limitation; it's not an issue in the present version of lilo, and it was never a problem with grub.
2. The Linux installation process will allow you to choose which drive to use, and how you want it partitioned. I'd suggest doing a custom/expert install as it gives you greater flexibility in terms of your partition scheme. I've also heard horror stories from people who chose the automatic partitioning option, only to have it walk all over their exist Windows installation.