2 Xp´s works great , use one just for audio production ( dont install net or antivirus there, will run very fast )
and another for your other works , internet etc
im using 3 systems , 1º for windows xp pro (no internet), 2º for linux ( internet and works) and the 3º im testing Mac osx x86 ( modded mac osx for pc´s )
for my audio / backups etc i have one external usb hardrive 160gb
about your programs partition , the programs only work with the xp you install them
example: you install from XP1 one program in E: drive , only that Xp will run the software , if you try to open in the XP2 the software will not work becouse is not registered in that windows
about the dualboot you dont have to do nothing , when you install the second windows , the instalation will detect another microsoft os and make a menu in the master boot record of the first hardrive , when you reboot the system you will see that menu and select the windows you want
i hope i have help, sorry my bad english