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16 Nov 2010  
gregrocker
Microsoft MVP

 

You need to boot the XP CD, install to space you have made by shrinking the Win7 partition, using the XP installer to format that space.
Partition or Volume - Shrink

Follow method two in this tutorial: Dual Boot Installation with Windows 7 and XP

Even better, put XP on a separate HD and boot via BIOS BOot Order or one-time BIOS boot Menu.
My System SpecsSystem Spec