My system has....
A 750GB Sata with win7 installed (dunno why really, i hardly use it).
A 320GB Sata with Ultimate Edition2.4
A 1TB USB backup drive
An IDE Optical drive ( i find an IDE DVD drive works better in my system than a Sata DVD drive).
I have the option selected in bios so that i can select which drive to boot from (if you don't have this option then press F11 or F12 to get the same options).
When i setup my system, i disconnected the Sata cable from the 320GB drive, then installed Win7 on the 750GB drive. After installation i power off, disconnect the 750GB drive and connect the 320GB drive. Start the system up and installed Ultimate Edition. When installed, power down and reconnect 750GB drive.
There is no need to disconnect the USB backup drive or disconnect the power cable going into the disconnected drives, just take off the data cable.
Installing them seperately doesn't require 3rd party formatting, just let the OS installers do it for you.
Dunno if it helps
Regards