Set IDE to either. This is only a drive location issue.
Plug ethernet if poss. Boot Windows 7 DVD,
select "Keep connected to internet during install" to get latest updates/drivers
select Custom install with Advanced drive tools so you can format first.
Windows 7 will configure the dual boot correctly, updating the MBR on XP and holding the boot files.
Not necessary to use BCEdit or EasyBCD since Windows 7 is installed last - Only if Xp was.
Give Windows 7 installer a shot to provide NVidia drivers first. It is driver
-complete, updated during install, with newer arriving quickly via Windows Updates. THis is because MS funded the WHQL partnership with all manufacturers to develop Windows 7 drivers - MS paid, they have them first.
If blue screens, install your own Nvidia drivers in safe mode.