XP Dual Boot scenario

Here's my situation. I've currently got a Dell Inspiron 6000 with a 30 GIG 4200 RPM HD. I've bought a new HD (Hitatchi 80 GIG 7200 RPM), and will be installing it shortly. I've already made a OS backup CD from the Dell Accessories program group.

What I want to do with the new HD is make two partitions, and install Win XP on both partitions, both acting as seperate OSes in a dual boot situation. Basically I want one OS to be tweaked for a particular application, with minimal background tasks running, and the second partition would be an everyday partition for dinking around with "stuff" (surfing, games, etc.)

My question is will I be able to install XP twice from the OS recovery CD I made, and will it allow me to choose which OS to boot to upon bootup?

Also since my laptop can only have one HD installed at once, I ordered an external enclosure (which I'll eventually put my 30 GIG drive in), but am I best off making the initial partitions with the 80 GIG Drive installed into the USB enclosure, or should I just let XP format it and setup the partitions?

Thanks in advance,

Aaron

System Info (in case it matters)
Inspiron 6000
Intel Celeron 1.5 GHz
512 Megs RAM
30 GIG HD 4200 RPM 2 MB Cache
(upgrading to 80 GIG HD 7200 RPM 8 MB Cache)
DVD/CD Reader/writer
Intel Mobile Extreme Graphics Card