To answer you questions:
1. Each OS has to go on either on its own partition OR its own hard drive. Because SSDs are so much faster, unless you have multiple SSDs, I partition the SSD into relatively small partitions and would install Windows 8 onto one and install Windows XP onto another with third partition having Program Files XP and Program Files 8 so that large apps/games are NOT installed onto the OS partition for easier imaging, which is done FROM one OS to another, so that you can image in less time than it takes you to use a short bathroom break.
In other words, you can nuke and reimage in less time it takes you to diagnose the smallest problem. I keep a txt file of things that need to be tweaked so that the image is tweaked once a month, usually around patch Tuesday so that WHEN NOT IF Microsoft or video card company or another hardware company messes up a driver you can reimage back to when things were working and figure out what needs to be done to have things just like you want them to be and working like they used to be.
2. Four partitions. There is a limitation of four for widest compatibility with old OS.
3. I installed Windows XP onto D drive partition first. Today, I would install Windows 8 onto C drive second, so that Windows 8 can pickup Windows XP automatically inside its multi-boot selection screen.
E drive is where I keep Program Files XP, Program FIles 8 and a folder inside which there are Desktop XP, Desktop 8, Start Menu XP, Start Menu 8, My Documents XP, My Documents 8, SendTo XP, SendTo 8, Favorites folder used by ALL operating systems I have installed, and used by Firefox instead of Firefox Bookmarks, REVISIONS folder where I keep txt files of monthly tweaks I make.
I store images on separate hard drives for faster imaging/reimaging. Every once in a while I burn images to DVDs.
In here, in headache-inducing details:
http://www.overclockers.com/forums/showthread.php?p=7273435