I have just installed a new hard drive with Windows XP on a PC and all is running fine. the old hard drive is now set to slave. The odd thing that has happened is when I access the C drive and look through the files, I find all of the files that was on the old drive. I haven't copied any files over on to this drive but they appear to be there, what has happened, its not a a big problem, more confusing really.
It would be helpful if you described the exact process you went through to install the new drive. You should also be aware that what dictates the boot drive is whether or not the partition has been set active, not whether or not the drive is a slave. It may be that you are actually booting from your old drive. Equally, unlike previous versions, under XP the system drive doesn't have to be the C drive. So maybe you are booting from the D drive.
rojash, you hit the nail on the head there!! I am booting from the new hard drive which is now G: drive which I thought was C: so now my slave is C drive and my main drive is G:
Won't be any problem at all. You don't have to boot from master, just make sure that one's master and one's slave. Any C isn't the main drive by any means, just the most common drive letter used in windows machines.