You're right, the second MS install will put a couple of files onto the "C:\" partition. That doesn't really do any harm unless you want to delete that first partition, because then the second install won't work eirther.
Anywho, if you want both Windows systems ( doesn't matter what versions ) to think they are alone on the disk, it's been a while but this is how I did it....
Install the first MS system on the "C:\" partition.
Boot up with a linux livecd such as systemrescue cd.
Create a second partition.
After you have created the second partition, make a note of what type of partition the first one is. ( should be fat ) then delete the first partition.
Save the new partition table.
Boot up with the XP cdrom and start the install.
Select to install on the "C:\" partition which in fact is your second partition.
After the install is complete, boot up XP to make sure it works ok.
Edit the boot.ini to have timeout=0 and the xp partition is going to be #2 .....
[boot loader]
timeout=0
default=multi(0)disk(0)rdisk(0)partition(2)\WINNT
Now you boot up with the linux rescuecd
Get into fdisk and re-create the first partition as type fat which it used to be.
Save the partition table.
DO NOT FORMAT ANY OF THOSE PARTITIONS.
Edit the grub.conf file in your linux system to add both versions of windows.