I cant quite yet understand why they all insist on resizing the partition and hiding the old one which would require new drive letters
The new drive is a diferent size than the old one, so if you don't re-size the partition, you will have left over unallocated space. If the new drive is smaller, re-sizing is mandatory. Hiding the old partition is necessary, as it still contains the OS and is marked as the active partition (OS).
You can always un-hide it later. You cannot boot with 2 active partitions, and booting with the 2 OS will create a tripple boot scenario for you. Just let the drive be hidden, or remove it before booting to Windows on the new drive.
Is there a reason why the new patition must be the same size as the old one?
No, see above.
Why cant I just copy the drive (cut and paste from XP64) and then just swap the drive letters?
You cannot change drive letters on the system partition (C). The partition that contains the boot file will always remain C. Same is true for any installed programs on C, they will only function on C. Changing drive letters in XP64 will only be effective in XP64.
Drive copying is a very simple and straight-forward operation, as long as you follow the rules. If you are not comfortable doing this, I suggest you back off and read up on these topics, especially the user manuals on the programs you are using. Partition Magic and Acronis come with very complete manuals and help files. Using free programs is fine for experienced users, but if adequate documentation is lacking you should use something else. Maxblast will do the trick too.
You might also consider disconnecting all other hard drives except the 2 while you are doing this. Reconnect them before booting to Windows on the new drive.