Its called dual boot, and with that setup you could easily run 3-5 different OS's.
Just partition that Terrabyte drive, install XP first (general rule is oldest OS first) Then do win 7 on a clean partition.
One minor note, Win 7 likes to be on C:/windows, to the point that it will rearrange drive letters to make it be that way. So put XP on D or E, it will be fine and happy there.