1) The only way I know of being able to do that would be through software RAID. It is not a standard feature on Windows XP Pro, but it can be "hacked" in using this tutorial: http://www.tomshardware.com/2004/11...
However, i would strongly advise against taking that approach. You never know if a patch from MS will kill that hack and render your RAID array useless (and unable to boot).
2) Yes, you would need to follow the instructions for the RAID controller/software you are using.
But, this is the wrong approach, in my opinion. RAID1 will only protext you from down-time in the event of a drive failure. It offers no protection in the case of a virus or other software/hardware failure that would otherwise make your system unstable or corrupt - both drives would have the same problem.
A better approach, IMHO, would be to use drive imaging software such as Ghost or Acronis True Image. You could set up the software to do a complete image of your OS drive to the spare drive. Depending on how much space you are actually using you could keep several versions on the spare drive. Then if you experiencing a problem with your OS drive you can simply run the restore procedure (either from within Windows or via a boot floppy/CD if the system is not bootable) and you can restore your hard drive in about an hour (usually less) to the exact same state it was in at the time of the image you are restoring.
You could set the software up to create an image automatically on a nightly or weekly bases - or whatever suits your needs.
RAID is not a backup!
Michael J