The hookup is fine. As I suspect you know, a Master/Slave jumper overrides the C/S signal -- so the optical drive would be Master no matter where you installed it on the cable. The only issue would be if you were using two different devices jumpered for the same setting (and clearly if that was the case the system wouldn't be working).
There is NO difference between a "Master" and "Slave" -- they are simply two different devices on the same channel => the "Master" has no priority over the "Slave"
Finally, having both drives on the same channel is fine ... it does not slow down the hard drive unless you're accessing both the hard drive and the optical drive at the same time => and about the only time you'd likely be doing this is if you were writing or ripping a CD ... in which case the bandwidth of the IDE channel is FAR more than you need to keep up with the CD's transfer rate (i.e. the hard drive wouldn't be slowed down at all). The one drive/channel advantage is far more important when you're using multiple hard drives in a RAID array ... in that case you definitely want each hard drive on its own channel ==> but in your case it's fine.
