I'm installing a second hard drive (320 GB SATA II ) Would it be a good idea to put a 20 GB partition at the beginning of the drive for the photoshop scratch disk? Also, is 20 GB enough? I'm just a hobbyist, and rarely work on more than one or two images at a time.

Based on articles from Barefeats and MAc Gurus, a partition on a disc is not recommended for scratch. It really needs to be a whole drive. Some folks use the scratch disc/work disc method, IOW, have a new disc that is only for where you save your work in progess, also selected as your scratch. Other than that suggestion, get a small 80GB or less HD for scratch only.

For now, I plan on using this second HD to store all of my image files (raw, masters, prints) So if I'm following you right, PhotoShop scratch will get along with the rest of my files, and not take big a hit in performance. I've read that getting the scratch disk off the C drive is a good thing.
Right now I'm backing up to DVD, but down the road, I plan on getting a external inclosure and backing up to multiple HD's.

I would leave my storage drive alone, use just for storage and nothing else.