1st h/d with the OS on it be primary master, cdrom primary slave, and the backup drive be secondary master?
Alot of systems need to be set up this way as that is how they read from the bios. Just don't forget to go into CMOS to tell the thing what you did! ;-)
Faster and simpler to pop the old 60 in as master to reformat and repartition it. Break it up into different drives for faster defragging as well. Fdisk is the best way since you may forget or lose the disk managers that come with the HD's. Some of them plain aren't worth using. (Unless you have Partition Magic)
We have several backup systems with 4 hard drives in our network. It makes for interesting evenings looking for something when you forgot to dbase a set of files.
