Super mysterious installation problem on new partition

[Christaras]

I have win98 on c: system partition, winxp on d: and want to install win7 on e:

I use plop boot manager to boot from USB and then the DVD drive so that installation takes place. I choose the empty partition or the unallocated space to create one. Installation takes place fine till the 1st reboot.

At the 1st reboot plop boot manager is gone from mbr. I instantly see the black screen of win7 boot menu and the error that winload.exe was not found. There's no entry like win7 ultimate setup for setup to continue.

I also see that temporary installation files bt and ls are almost empty inside e:
Shouldn't they be on c: ?
There's a file called bootmgr and a folder Boot on c:

Don't know what's happening and the installation doesn't continue after 1st reboot.

Why win7 has to be associated with win98 and xp to boot? Can I make a 2nd system partition (instead of c: win98) which will be the same where win7 will be installed(e???

Alternatively can I make a 2nd Disk(disk 1)?
I see only disk 0

Thank you!

 

[SIW2]

You will probably find it easier to have a second disk.

Then you can select which disk to boot from in bios.

Pleas fill in your system specs.

 

[Christaras]

You will probably find it easier to have a second disk.

Then you can select which disk to boot from in bios.

Pleas fill in your system specs.

I want to do it on the same fixed disk please because I haven't a second one or portable. And removable flash drive has issues for example slow speed and some win7 versions not detected and non bootable from flash drive

What is going to happen if I make active the partition I wish to install Win7(e? Shift+F10 command prompt before choosing installation partition
Alternatively can I make a fake disk? Virtual hard drive?

 

[SIW2]

What is going to happen if I make active the partition I wish to install Win7... Shift+F10 command prompt before choosing installation partition

If you make the win7 partition active it will boot from there and use the bcd store in the \boot folder on the active partition

You should be able to add an entry to the bcd store for xp.

something like this