Yea, I agree. Did you want to re-install XP on this newer drive because of a current problem with the installation of this older drive? If not, then you can use a ghosting program like Symantec Ghost to copy everything from this older drive to the newer one. It will copy everything.....registry entries, files, applications, etc.
Dragging and Dropping normal files from the old drive to the new one won't be a problem but that's just for normal files. You can't simply drag and drop an entire application from one drive to another. The registry entires will never be created for the application to work correctly...You will have to re-install all of the applications on this newer drive anyway.
But if you use Ghost....it's a one shot deal. Just "image" the drive and you are all set.