OK lets have a look at the hard drive problem- Drive 1 is fine and is partioned as 2x 80GB , that's normal, and is probably the optimum way to do it anyway. Keep the lower drive ( usually drive C: ) JUST for programs , never add any images or anything else ( except more programs) , keep it defragged, and the computer will run at best speed. NOTE My Images, My Documents, My Videos will all put the stored data on drive C:- so try and move as much as possible to another drive if not needed or your speed will suffer dramatically.
Lets look at the hard drive that's not working. Look on the desktop , right click on My Computer, click on Manage,- click on Disk Management ( terminology might be slightly different- I don't have Vista next to me at the moment) . From that follow the instructions to Format that drive (right click on the greyed out area in the disk management screen) (it should come up as the next available physical drive - probably Drive F: - Make sure its NOT dirve C: or D: or E: ) Partition it however you want, ie 2x 80GB etc , but as its a data drive I would suggest you use 1x 160GB and name the drive DATA... There is no need to remove it from the machine- its all software!!
As a matter of interest , just what is drive D:- you have drive C:- ( main drive) and E: data drive, is drive D: a card slot or something similar? ( or is it the disk drive we are trying to sus out).
You will need probably to reset the PC a couple of times after formatting etc , for Vista to fully find the additional hard drive.
All of this is quite normal for a 'new' machine- it allows you to decide how you want it to work to suit you, otherwise you are stuck with what the manufacturer gives you.
As to why Vista can only handle a max of 4GB including Video RAM, it all goes back to the starting point when Vista was designed - 4GB of RAM was an enormous cost, and not even available .. For a long time RAM maximum was 1GB so a pair gave you 2GB , and it was thought, and is very sound thinking, why would you want more. A 'huge' image is 20MBytes how many of those can you fit in a 2GB of RAM and why do you want more. Now RAM has dropped in price , and 1GB has moved to 2GB in a package, and the manufacturer usually provides two slots maximum, so 4GB is again an optimum. Remember you get nothing for free , an extra slot costs money, needs support circuitry, is heavier , bulkier, and adds very little to performance. If MS had designed XP/Vista to use 8GB or 16GB then board manufacturers, chip designers would have added the extra components, and probably doubled the price of the Laptop you have.
The same applies to hard drives, not so long ago 3.3GB was huge, now I buy drives in Terrabytes ( 1000GB). In a couple of years your 160GB drives will look like postage stamps compared to what will be available. I can see that the growth of solid state memory (RAM- flashdrives etc) will , in the next three years , exceed your 160GB hard drives.
Its like designing cars really- the maximum speed is 70MPH in UK so why do want a 200MPH version- you can't use it, just brag about it. I suspect you will be using your laptop for heavily video based applications - be it games or whatever- and the biggest video RAM you can get will suit you far better than more RAM.