Leaving XP on the original drive is certainly the most straightforward option. You don't lose any data, programs, settings, etc. However, if your PC could do with a bit of a clean-up and re-install of Windows anyway, then installing it on the new drive would be preferable as it will be faster and more reliable than your old drive. If you install XP on a SATA drive, pay attention to what Jephree said about motherboard drivers - you'll need these on a floppy disk at the start of the XP installation process ...... so download them BEFORE you wipe your PC !
