The performance gain would only be noticeable when using both disks, such as when copying. In other words, not a factor. The only useful case is when one disk is the system disk and the other contains your data. However, 500 GB is too much for the system disk.
Larger disks are a bit slower, but again, not something you will notice. 1 TB is today not really considered as large.
My own suggestion would be to take a 1 TB disk and partition it into two :
- system partition where Windows and
all applications are installed, of
about 100 GB
- your disk where you put your data
The rationale is that if Windows gets broke and you need to re-format and re-install, then at least you don't lose your own data.
Another reason is that this allows taking image backups of the system disk. As the most dangerous system component that can break Windows is Windows Update, it's advised to set it on notify-but-do-not-install and take a backup of the whole disk before. If the system disk is broke, you can then boot on the emergency CD that comes with the backup product and restore it.
I do advise going to Windows 7, rather than XP, since it has much more sophisticated utilities for backup, restore and general trouble-shooting. For somebody who is not a power user, it's more user-friendly than XP.