[Vaskez]

1)Actually, if you have loads of RAM like you do with 512MB, it's better to turn virtual memory off altogether. Why? Because if it's on, Windows will use it and you don't want that because your real memory is much faster than continually swapping in pages of memory from your hard disk. You only need virtual memory if you don't have enough actual RAM ie. real memory.

2) Yep, adding a 2nd hard disk is a good idea. The point is not only organisational though. You should partition your drives anyway. Put the operating system on its own partition which is as small as possible. This way you can defragment only that drive often as that will experience the most changes and this will speed up your OS loads. Put all your applications on another partition. This partition shouldn't change much so you won't need to defrag it so often and good job too as it will be much bigger.
Personally, I have 2 HDs as well. On the first one I have drives C: and D: C: is Windows 2000, D: is applications.
On the 2nn disk I have drives H: for work and personal files, G: for games and I: for large files like graphics and videos and music.
Of course it;s good to keep a copy of important data on both drives but I wouldn't bother mirroring - this takes up loads of space - unless you really can't afford the time to reinstall things if your whole HD crashes.

Just use the windows backup program to back everything up onto your second drive.