After you have both installed just run a startup repair with your windows 7 disc. It usually repairs it on the first try. Both OS`s should then be shown after post. You can then install EasyBCD to make any changes to the boot menu. Just did this 3 times on my experiment pc, out of sheer boredom.
Use the partition wizard bootable cd to make your 2 partitions, set the windows 7 partition active, then install 7 on the 1st then XP on the 2nd. Run the startup repair once and your done.