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It is possible to install up to four IDE devices in total - IDE devices being hard drives and CD drives. So if you have only one CD drive, you can install three hard disks. As long as the power supply can handle it.
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Indeed, Doc is quite right on this. Just make sure you have enough free power cables running out of the power supply.
A good advice is to have the second HDD hooked up as master drive on the secondary IDE channel, this will give a slightly higher performance of the drives as they will not have to share the same IDE cable.
Also, among some _very_ old hardware, there _might_ occur some with only a single IDE channel, or able to support only one (having in mind those junky pieces of hardware that needed I/O cards for HDD attachment).