I have 2 Hard Disks, one split equally into C & D and the second E. Although I have backed up D & E (just in case) I am assuming that when using the recovery disk (created when I first got my laptop) that it only overwrites the C drive which contains the operating system. Could someone please confirm or correct me before I go ahead!

Too hard to tell, The owners manual would tell you. Normally there are two types of disks. One is the simple xp and the other is the complete oem image. On some disks you can choose to repair to save most of your data. Best choice is to backup to remote storage and test the backup before you go farther. "Best Practices", Event viewer, host file, perfmon, antivirus, anti-spyware, Live CD's, backups, are in my top 10