Spot on...
Just use the same IDE cable for the two DVD drives (connected to the secondary IDE port on the motherboard) and the two harddrives on the their cable (to the primary IDE port, usually closest to the CPU)
Now there is one little hurdle to get over, and that is setting all the devices as master and slave. This is done on the rear of the drives by placing 1 or 2 jumpers to a specific location you can see this
guide for Hitachi HD.
If you want to keep your OS on your old drive, this disc needs to be set as the same type as it is now, presumebly master. you will the need to set your new drive to slave by setting the jumbers in accordance with pictures on the above link. Should you want to install the OS on you new drive (recomended) then I would suggest setting that drive as the master drive.
Furthermore the master drive should be connected to the cable at the end of the IDE cable. So that one end is connected to the motherboard and in the middle there is the slave drive and in in the other end the master drive.
For the DVDs you should set the burner as master.
It really isn't as complex as it sounds. But if you do as I have desribed above you should be clear of trouble.
Concerning how to partition the HD... I suggest you type partition into the search field in the winXP help and support (from the start menu).