First, be aware that Mdk 10.2 is still in *beta*, so you may find it quite buggy. The current Official release is 10.1.
Personally, I would install it on the primary drive, with XP. Just because it is easier for a newbie to set up that way. And you can get by with much less than 20GB, unless/until you decide to go fully Linux.
I would suggest letting the installer automatically set up partitions in "unused space" on the Windows XP drive. It will create 3 partitions for you:
/ - the root directory
swap - for system swap files
/home - for user (your) files.
By default, Mandrake uses Lilo as a bootloader. Some people prefer grub. It is purely a personal preference thing. In either case, write the bootloader to the MBR. It will recognize your Windows setup, and will include it as one of the boot options.