You have to install Windows XP only after installing MS-DOS, Windows 95, Windows 98, or Windows Me to prevent these operating systems from overwriting the Windows XP boot sector and the Windows XP startup files
Welcome to the forums wicked, lets see if we can help.
The above quote is from a Microsoft site, so it seems like you are doing things correctly so far.
So you have two hard drives, what you need to do is to install Windows ME onto the C:\ drive and once that has finished installing, install Windows XP onto the D:\ drive.
You must have both hard drives connected when installing both sets of operating systems.
Are wanting to have XP as the main OS, if so I have read other reports that "XP Pro wipes out the ME Operating system partition upon booting" so could be worth setting up ME as default.
Remember if you want to access your Windows XP drive from within ME then you will need to install format the Windows XP drive in FAT32.