Sun,
YES you can. Actually, it would be PRIMARY hard drive and secondary.
I would FORMAT the old drive and clear it if you are just going to use it for extra storage, ORRRRRRRRR
You could GHOST your new drive and system when it is ready onto that drive so you have a backup of the operating system and all the stuff you have currently.
Should you ever lose your new drive you have a backup.
That is how I do it. I GHOST (IMAGE) my main hard drive onto another hard drive.
Matter of fact, I am glad I did because last week I had to use my backup and re-image my main hard drive. I managed to delete several critical files to the boot system and could not recover from it.
I use a 32 GB flash drive to store weekly backups to my email, mrs. micro's email (address books, in box)
and any data that I want to put back on quickly after recovering the operating system.
With this in mind, you could also make an IMAGE to another PARTITION on your large new hard drive should you want to use that approach, which I believe is what Mark is referring to.
Lastly, if you use my method, I would buy another hard drive. Use the old one as total operating system clone as discussed above, and the new one can be your added storage should you really require it.
FLASH drives are cheap these days as well.
Okay Sun, it looks like you are on the right track and it won't be long till you are running.
DOWNLOAD and install SP 3 and updates.
Download and install Microsoft Security Essentials also, unless you prefer a different security.
I am sure you will remember to go to Adobe.com and download READER and Flash player and then download JAVA as well.
We are here to help!
Take care,
micro... 
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