|When you boot the computer do you see a screen to choose which OS to use? If not then the following applies.|
If you do have that option then you MAY need to run the MBR command to repair the Master Boot Record or WinXP might not start properly.
You don't need to do anything. If you have lots of unwanted files on there or an OS you don't want then simply format it and then use it to install programs or save files, whatever.
You could also make it part of a dynamic disk, which would treat it as one drive. I don't recommend doing that though. I just threw it out there because it is possible and you may encounter that option. In your case there is NO advantage and some disadvantages to using dynamic disks.
Just format it from within Disk Management or My Computer using NTFS.
You will have the option to change the drive letter at that time, should you want to.