Partitioning, XP, SATA, Ultrabay, aargh. Any Ideas?

[CRSO]

I am a music producer and I HAVE to use Windows XP because my Tascam Digital Audio Workstation doesn't have Vista drivers plus, all of my software (Logic, Acid, Soundforge, Goldwave, etc.) runs a lot better on XP. Also, Iwant keep my audio stuff entirely separate from everything else (on a different HDD with a barebones XP OS). I don't want to install any other programs on that drive / OS except for Audio recording and playback programs.

Now, I also have music video's (a ton), a few thousand pictures (my wife is a photographer) and a buttload of documents. All the basic stuff everyone has but I want to keep that stuff seperate from my audio.

I have a T60 and have 2 HDD's that I use.
100GB SATA: Used for audio production only (70GB's)-Must stay in the main bay because of the SATA
160GB PATA: Everything else (85GB's)-Must stay in the ultrabay

I am going back to XP for everything!!!

This is my dilemma:

I am currently booting to the 100GB SATA in the main bay and accessing the 160GB PATA in the ultrabay. I sometimes boot to Vista in the Ultrabay but what if I want to burn a disc or watch a DVD? My main concern is that I want to be able to have ALL of my information on one drive.

I currently back everything up onto a 250GB external drive. I simply drag and drop the folders (easiest way for me, I can actually see all the files moving over) because I don't trust compression, images, backup software, etc.

1. No drive is big enough for all my stuff. I had everything on the 160GB but only had 5GB's left. I cannot even use the 160GB in the main bay now due to the fact that it is a PATA. The only SATA drive I have is the 100GB that came with my new T60.

2. I don't want to fork out more ca$h on a huge SATA drive. I just bought a 100GB PATA and 160GB PATA when I was using my T43. I just got such a good deal on this T60 and this SATA stuff just banged me out....

3. If I do get everything onto a bigger drive, should I just partition it or something? I've NEVER used a partition before and am new to it. I can diagnose the hell out of any networking, hardware, software, etc problem but have no idea if a partition would benefit me.

Any ideas are greatly appreciated!

MOD EDIT: Duplicate thread.