Data Transfer to New Hard Drive

Hi everyone, this is my first post on these forums so please bare with me.

I just bought a new hard drive (Hitachi Deskstar 120GB ATA) and am planning to replace the current one with it. I want to transfer some of the files from the old one; but I don’t want to clone the drive (I’m going to use a clean installation of XP). My question is how to go about doing this.

Do I just pop the new drive in, format it, install XP, transfer the files I want, then remove the old drive? Is it even possible to run two copies of the same OS on a machine?

If that method doesn’t work, please let me know how else I could accomplish this.

Thanks