If I have a computer with a pair of hard drives daisy-chained on a single EIDE ribbon cable, then install a single SATA, and finally install Windows, are the hard drives treated as drives D and E?
Yes and no.
The disc drive will usually take D so your other drives would be E and F
IIRC you can assign the drive a letter from choice.
Correct. However I think certain letters such as A and D are 'disallowed'