XP in C Drive & Additional (E drive) External Hard Drive

​ Hi. Please forgive what may be my simple ignorance. ​

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​ I have a Dell Dimension 3000 with XP (Home) operating system & 80 Gb HDrive (on my C drive)/512 RAM. I just purchased & installed without any problems a Western Digital External USB 2.0 HDrive which gives me an additonal 120 GB on my E drive (the use of which will be exclusively to load miniDVC (not DVD) camcorder footage using Nero6 (so as not to overload the C drive). ​

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​ Q: In order to use Nero6 or any software on the (External HD), do I first have to reload/install Windows XP, as well as the Nero 6/other software, on this new external hardrive? Or, do I merely have to capture the desired video from my camcorder (using the firewire connection in my system) to the E drive (external HDrive) & count on the "system" to work (both Windows XP/Nero6/other software? ​

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​ Hope my issue is clear. Thanks. ​