Partitioning Old Hard Drive

Hey all. I recently posted about a pretty extensive list of problems I was experiencing and decided to just buy a new PC. I felt it was time for an upgrade anyway. Now, my new HDD is 1TB and it's all one partition. I just plugged my old HDD along side it and I am currently just copying some data over to my new one. The old HDD is split into 2 partitions.. (Windows and programs on one and personal data on the other)
Once I copy everything I want from my old drive (pics, music, etc) I would like to format and merge the 2 partitions on my old HDD into 1 large free space since I won't be needing Vista on there and simply leave the drive installed in my new PC as a back-up.

My question is which is the best way to do this. I'm running Windows 7 64bit on the new system. Do I have partition options during format? Or should I just use something like Partition Magic, merge them THEN format?