Greetings Canadian
For some answers to your questions...
>>So each copy of XP will have its own registry, its own settings, etc?<<
Yup... That's correct. The one difference that you will see is that there will be certain "root files" in the first partition that there will not be in the 2nd. I am organized as such:
C: C_WinXP1 <------first primary partition
D: D_Temps <--- I set temp folders here (plus browser caches), also I direct the pagefile.sys' of XP1 and 2 here.
E: E_Apps <---- All Applications get installed here
F: F_Home <--- All keepsakes go here (created files; doc, xls, txt, .jpg, etc.) plus music, videos, etc.
G: G_WinXP2 <------second primary partition
H and I are my CD and DVD
J: Dos
The root of C (WinXP1) looks like this:
Documents and Settings <-- folder
Program Files <-- folder
Recycler <--- this may be hidden on some machines, I set all hidden files/folders to view
System Volume Infomation <--- this may be hidden on some machines
Temp <-- folder
Windows <-- folder
Autoexec.bat <-- file
Boot.ini <-- file
config.sys <-- file
IO.sys <-- file
IPH.ph <-- file
MSDos.sys <-- file
NTDetect.com <-- file
ntldr <-- file
The root of G holds the same folders as the above, BUT it does NOT hold any of the above files. Those files are very important AND they must be on that first WinXP's install drive. The Boot.ini and ntldr files are particularly important to the dual boot. They are created/placed there by Windows. The Boot.ini will hold a simple menu that arrives on screen at bootup, so that you can direct yourself to your WinXP1 or WinXP2 (those are my unique names for my boots, you can select other names.)
>>But I can share programs across both copies of XP as long as the shared program is on a different logical drive and not the primary?<<
This depends. That which exists on the particular primary to which you boot MUST be able to open that which you intend to open. In some cases, this takes an install of a program.
Example:
A.) When I boot into WinXP2, even though it is only a minimum WinXP install, I can read many file types located on all other drives/partitions (as long as the other partitions are not hidden, i.e. you must "unhide" them for this purpose). I can read .txt, .jpg, .doc, (in some cases), .bat, .html and so on, with the vanilla WinXP install.
B.) If I want to read Quattro Pro (.qpw), Excel (.xls), Word Pro (.lwp) and many other files, those created by installed programs, THEN I must install that application from within the primary within which I want to read those files. i.e. If I want to use Lotus files (.lwp, .123, .org) while I am booted to the G partition, I MUST install the Lotus Suite when I am in the G partition.
C.) I have, in times past, done FULL installs of both my C and G drives. In this case, I most often go into C, install an App to the E drive, then go into the G drive, and install the same app to the same folder on the E drive. This keeps from the App taking up double the space on the hard drive. Not all programs permit you to do this, but most/many do. A problem is when you uninstall a program from C or G, then go to try and use or uninstall it from the other partition. There are tricks for this
>>What about the boot.ini file? When I install the 2nd copy of XP, will Windows take care of this? In other words, when I turn on the computer, I should have a choice between either instance of XP.<<
Yup
My boot.ini currently looks like this:
[boot loader]
timeout=20
default=multi(0)disk(0)rdisk(0)partition(2)\WINDOWS
[operating systems]
multi(0)disk(0)rdisk(0)partition(2)\WINDOWS="Windows XP1 Media Center Edition" /noexecute=optin /fastdetect
multi(0)disk(0)rdisk(0)partition(3)\WINDOWS="Windows XP2 Media Center Edition" /noexecute=optin /fastdetect
Windows creates the Boot.ini for you, but you can edit it later. You must take the "read only" off of it AND you MUST be careful to not delete essentials in the boot.ini.
I edited my boot.ini with the XP1 and XP2 so that I knew which XP was which

The "timeout" is merely the seconds you have to make your menu choice, you can set that at 2 (2 seconds) or 20 (20 seconds) or whatever. The "default=multi(0)disk(0)rdisk(0)partition(2)" tells Windows which partition to open by default, in my case "(2)" is my WinXP1 install. Not to throw you off, but my DOS partition is actually the 1st primary, I renamed my drive letters, so that all partitions listed and viewed the same in each WinXP. I'll see if I can insert a graphic later.
>>Finally, I will want to change the description on the choice screen to something like:
"Windows XP - Standard"
"Windows XP - Minimal"<<
Yup, you can do that by editing the boot.ini

Once you have your installs, you merely go into either WinXP, you take the "read only" off of the boot.ini file (right click the file, select "Properties," uncheck the "read only", press Apply and OK). MAKE SURE you have a copy of that original Boot.ini first, in case you boo boo (you DON'T want to booboo on the editing.) Save after editing. You will see the change when you reboot. The boot.ini file is merely a text file, I believe.
>>Sorry, for all the questions, you definitely know what you are talking about. I'm learning something new every day.<<
Sorry for all the answers...but it is a few minute conversation, just looks long in text

BTW, there are some WONDERFUL things that you can do once you have that new install. I have many tricks that I use with this

I actually use my dual boot to make sure that my systems are rarely ever down... In the event of a catastrophe on my WinXP1, I boot into my minimum WinXP2, delete all files on WinXP1, then copy/paste a backed up "fresh WinXP1" onto the C partition. There are "preparations" for this beforehand (remember I install to my E drive, so even my C drive stays slim in size, I also set my pagefile.sys to be on the D drive), but I am set and it is hugely useful
Gammers