There is a simple automatic solution.
Download and install Visual BCD Editor - Windows 7/Vista
The tool comes with "Dual-boot Repair" tool.
Start it. Click "Automatic Repair". Confirm.
Now your system should boot by default to Windows 7.
In Windows 7 run Visual BCD Editor.
RightClick in treeView and select "Create missing Windows loaders".
No parameters, no partitions or drives to specify !
Now you will have a dual-boot system with Windows 7 and Windows XP.