Please post back a screenshot of your full Disk Management drive map, using SNipping Tool in Start Menu.
An OS can be installed to a Logical partition, but it's boot files cannot be on a Logical partition.
If your System Active dual boot files for XP/Vista are located on SysReserved partition then Vista should update those files for a multi-boot, and thus not require being on a Primary partition to boot from.
But we can't know for sure until we see screenshot. You may want to get rid of a useless utility partition or convert a data partition to Logical so you can make use of all 4 Primary partitions allowed.
What is the exact error message you are receiving when you attempt to boot Vista DVD to install to the Logical partition you've created?