Planning to reinstall xp pro sp2 to clean up my system...

The 2 drives i were using: 120gb and 250gb (ata)
their choc full of recording sessions so don't have much room to shuffle things around.
my question is:

if I was to install xp onto a much older 10gb maxtor (31024H1) and reserve this drive for only the operating system (not swap file),
do u think performance would be affected drastically?

Also, is it a good idea to partition those bigger drives into smaller sections once I've cleared some space on them?
I use my pc to record and produce music.