I'm going to install a second hard drive, for the sole purpose of having a full system backup in the event of the current hard drive failing.

I already have backups of My Documents etc that I can transfer, but I want to transfer the entire hard drive contents, including the operating system Windows XP.

I don't have a Windows XP disk, my system was supplied with XP installed, and with just the usual PC manufacturers recovery CD. I have no wish to breach licensing regulations, but don't want to have to buy a XP installation CD unnecessarily.

I have Paragon Drive Copy, and Paragon Drive Backup installed, but don't know which of them to use. I've heard that there are special security codes that relate a particular hard drive serial number to a particular copy of XP; and that if you try copying the entire hard drive including XP, that the target disk will not boot, due to the system not recognising the correct serial number.

So how do I copy XP to another disk that will boot ?

I haven't used the Paragon software but Paragon Drive Backup should be able to do it without a problem - as should any utility software that may have come along with your hdd. I note that their blurb says "While copying one hard disk to another you can force the program to adjust partitions' sizes according to hard disks' sizes, or you can change the size of each partition manually" so those options are up to you.

Getting the replica from one drive onto the other should be straightforward enough. What you do next can be very important and it depends on how you intend to use and access the backup cloned drive.

The first consideration after making your cloned drive is to COMPLETELY REMOVE the current master BEFORE YOU BOOT UP to the new clone (now set as master) FOR THE FIRST TIME. The clone's registry (being initially identical to the original) would assign all the drive letters from the original drive before adding new drive letters for the cloned drive). It is no good simply hiding the original partition(s) they must not be physically attached at all until the clone has rewritten its own registry values. After these are imprinted any number of other partitions or drives can be added or removed.

The above paragraph is actually the area that is affected by the disk signatures and these are not important at all with respect to copyright etc etc. It is quite OK and normal to make a clone of one system onto another HDD. It is most common to do this by creating an image file and then restoring this onto a new HDD if the original fails for some reason. What is not OK is to take this installation and run it on another computer. The disk signatures along with an algorithm for each partition uniquely identifies each partition and allows for the drive letter assignments to be remembered. Once new letters have been fixed with the new disk signature the original drive can be reattached and additional letters will then be assigned as appropriate to it.

The second main consideration depends on how you intend to access and boot to this clone and that can be achieved in a number of ways:-
(1)You can organise a dual boot menu by editing boot.ini on the original HDD and adding a reference to the new boot partition onto it.
(2)You can leave things as they are and change which one you want to boot to by either swapping master and slave or by changing the boot order from HDD-0 to HDD-1 in the BIOS setup.
(3)You could also clone the boot.ini modification onto the second drive so that whichever one you use as the BOOT HDD will give you a boot menu that will start up both installations.
(4)You could use a third party boot manager to organise which partition is booted up.
(5)You could remove the drive totally and wait until the "rainy day" that you really need it.

A couple of further hints:
(a)Keep the same order and types of partitions on both drives up to and including the WINDOWS partition and you will PROBABLY have no problem booting up the new clone. If there is a problem then it is probably because the partition tables do not match the layout of the physical partitions; this is easily rectified by editing the boot.ini file.
(b)Make yourself a WinXP boot floppy by formatting a floppy FROM WINDOWS XP so that it has an NT boot sector. Then copy boot.ini, ntdetect.com and ntldr from the HDD onto the floppy. You are now in a position to easily edit the boot.ini on the floppy to regain entry to either HDD in case any of the values on the HDD no longer work or apply.

PS
I forgot to say that I would highly recommend that you do your cloning from a dos boot floppy or CD. That is to say that I recommend that you do not attach the new hard drive at all while windows is running with your current system. If so it will read the clones values into its registry; the registry will be cloned; and when the clone is reinstated it will find the drive letters imprinted by the original and you will still end up with the wrong drive letters.

If you have already attached the drive then there are a number of ways of generating a new disk signature - the easiest perhaps being to attach it as the only HDD and then run fdisk /mbr from a WIN9X boot floppy (not fixmbr from an installation CD, which you don't have in any case).

None of this is that hard to do but the "Devil is in the Detail" for sure since it doesnt take much to screw things up - though unless you are daft you shouldnt affect anything on your current system.

Personally I would image the relevant partitions to CD/DVD - attach the virginally new HDD on its own and restore those images to the drive. Boot up once to the new restoration and barring any partition table idiosyncracies everything should be straightforward.

Many thanks Paul

That info will be a great help to others as well as myself