Dual Boot WinXP and Win7_XP Mouse freezes

Hello, I had windows xp installed on my C: drive, I added a new hard drive D: to my system. I installed Windows7 home edition to the D: drive on my pc.

The Problem:When I try to boot to windows xp, the mouse and keyboard fail to be recognized by the XP operating system and I can not access anything in XP, even safe mode. The devices work in the bios.
Booting to windows 7 is not a problem.
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OS Name Microsoft Windows 7 Home Premium
Version 6.1.7600 Build 7600
Other OS Description Not Available
OS Manufacturer Microsoft Corporation
System Name WINDOWS7
System Manufacturer INTEL_
System Model DX48BT2_
System Type X86-based PC
Processor Intel(R) Core(TM)2 Quad CPU Q6600 @ 2.40GHz, 2400 Mhz, 4 Core(s), 4 Logical Processor(s)
BIOS Version/Date Intel Corp. BTX3810J.86A.2000.2009.0701.1128, 7/1/2009
SMBIOS Version 2.4
Windows Directory D:\Windows
System Directory D:\Windows\system32
Boot Device \Device\HarddiskVolume1
Locale United States
Hardware Abstraction Layer Version = "6.1.7600.16385"
Installed Physical Memory (RAM) 4.00 GB
Total Physical Memory 3.25 GB
Available Physical Memory 1.92 GB
Total Virtual Memory 6.49 GB
Available Virtual Memory 4.62 GB
Page File Space 3.25 GB
Page File D:\pagefile.sys
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Another oddity that I have noticed on my newer PC, which has the same dual boot set up, is that, which ever OS I use, the drive letter changes to C: . No matter if I booted to XP or Win7. The mouse and keyboard work fine on this PC.