You basically have two options to setup a VM with two drive letters. The first one is to setup the VM with a single virtual disk and create two partitions when installing the guest OS (some operating systems let you even reconfigure partitions after installation too). The second option - the one I prefer - is to create a VM with two virtual disks (or add a new virtual disk to the VM in it's virtual hardware settings) and create the D: drive on the second disk. As before, partitioning and formatting is done from within the guest OS itself. Except for the VM creation, the steps for setting up an operating system with a C: and a D: drive are the same as with physical hardware.
André