you should be able to add a mirror. try deleting the formatted partition on the empty drive.
This site steps through the process (which you probably already know), but it does not specifically say whether the second drive needs to be empty. the closest it gets is to say:
When a mirror is added to an existing
volume Windows creates a second volume
equal in size and file system type on
a second disk of your choice and
copies (a process also known as
resynching) the data on the existing
volume to the mirror.
However, this Microsoft KB article (which deals with Server 2003) does state that the second drive must be unallocated.
In this scenario, disk 1 is the disk
on which the image of disk 0 will be
1. Disk 1 must be unallocated space before you can proceed with mirroring.
Early this year i had to do the exact same thing on Windows 7. I know i managed to set-up the mirror without destroying the data, so it is possible. Alas, i do not recall exactly the steps i took.