I just found a 1.7 GB hard drive in my basement and I
was wondering if it is possible to install 3.1 on this
second hard drive and dual boot with 98SE which is
on a 30 GB hard drive?

you will need a partition manager, such as partition magic, to setup the partition for win 3.1 and the dual boot option.
win 3.1 will be fat16 and win 98 will be fat32. both operating systems will not be able to 'see' each other files.

Win98 should be able to "see" the fat 16 hdd justt fine and dandy.........

If you don't use the Windows 3.1 all the time, you might just go into your CMOS Setup (BIOS) each time you want to boot it, and change the boot options to boot from the second hard disk first, and then switch back when you are done. I used to do this. It avoided the necessity of a boot manager (software, rather than firmware), and since I didn't use the 2nd option very often, it really wasn't a hassle.

To install Win 3.1, though, you probably will want to plug in only the 1.7 gig hard disk, and once finished, then plug the 30 gig drive back into the primary master, and the other drive as slave or on the secondary channel.

Good luck.

Thank you all for your input it was very helpful.