I currently have Windows Ultimate OEM 64-bit version installed. I have 2 hard drives on my system. My 160GB SATA hard drive has Windows Vista Ultimate 64-bit installed and running very well. (C)

I have a second hard drive (80GB IDE) on my system which has backup files. I would like to install Windows XP Pro 32-bit version on this second drive as I am a gamer and have some games that will not run on 64-bit OS.

Am I able to install Windows XP on a second hard drive (D) without affecting the Windows Vista installation on Drive C: and still be able to choose which OS to start? I can choose which drive to start with but I am afraid to install Windows XP and then have a problem with my Vista installation

AMD FX55 2.6Ghz
ASROCK 939 DualSATA2 Motherboard
2GB of Patriot PC3200 Dual Channel DDR RAM
Nvidia GeForce 7300GT 256 DDR2 PCI Express
Soundblaster Audigy Value
Maxtor 160GB SATA drive
80 GB IDE Drive 7200

Any help will be greatly appreciated. I'm uncertain because I already have Vista installed and feared damaging the boot record by adding win xp on separate drive after.

The simple answer is YES you can.
My test machine is triple booting XP Pro, Vista Business and Fedora Core.
OK I have to use a boot loader due to Fedora, but when I had the two Windoze on Vista has an inbuilt boot loader. Says Vista or Other Windows.
Admittedly I started with XP on C:\ and then but Vista on D:\ but I don't see a problem with your approach.
All on a stock HP AMD64x2 3800+ box.