Yes you can set up your gaming progs to run on a separate partition.
You can also boot from a Win XP cd, but to allow dual booting from one system to another you need to make both partitions as "primary" partitions.
One is hidden while the other is visible as with Partition Magic.
Each primary partition has operating sys files of its own and separate boot.ini entries to give you the boot up choice.
You can use the software prog "Virtual Drive"to show a drive icon and load the gaming without the cd loaded, but it wont boot from that drive, unless someone knows something I dont !