You can usually put a light load on while burning (eg. web browsing) and be ok... Editing a word processor document would probably be ok too - with burnproof, you don't have to stick to the old "do nothing else while burning" rule, but you should avoid anything which would cause more than occasional disk access and light CPU usage, though if the system is a little short of RAM, better to to avoid disturbing it.
If you switched the master/slave settings, the drive letters would swap - at least, they would under Win98SE, XP may handle things differently.
If it's happy with the DVD writer as secondary slave, I'd let it be - it's just that the secondary master position usually seems to offer better compatibility with hardware and software that has problems with slave - maybe it's one of those old issues that faded away with better adherance to standards.
That's transferring it to the SATA, on a converter?
There may be something left to do in the BIOS setup - for single, or non-raid drives on a RAID controller, it needs to be in JBOD (Just a Bunch Of Disks) mode - that's raid terminology for "non-raid" operation.
There may be a problem with the drive letter changing as well - Windows will not boot under those conditions, though the first controller to boot, should be taking letters from C onwards.