After spending 3 hours trying to get my PC which was preinstalled with Windows 7 to dual boot with XP, I finally found the solution that worked for me.

I tried all of the suggestions that were given in the support forums including meddling with my BIOS and none of them worked for me. I even tried using different partitioning software because I was worried the partition wasn’t setup properly. – It didn’t make a difference.

My Solution:

1. I used Windows 7 partition manager to create a new primary partition to house my new Windows XP installation. I set it to FAT32 file system just for simplicity and because I had started to stress out with NTFS at this point.
2. Then I put my windows XP disc in and began the installation process, however the problem came when the computer finished the command line based installation and was ready to move into the Graphical Interface section of the install process. When the system rebooted it would halt with a message “Error Loading Operating System”. Which was very unhelpful.
   Restoring Windows 7 to Working Order
3. In order to get back to a reusable Windows 7 Installation you have to replace your Windows XP CD with your windows 7 DVD and reboot from the DVD.
4. After selecting your language, click on the little link in the left hand side of the screen and select the command line from the list of options (after you select the Windows 7 installation you want to repair).
5. In the command line if you run the following commands in order;
   bootrec /FixBoot
   bootrec /FixMbr
   This should allow you to boot back into your original Windows 7 installation.
   Completing Windows XP Installation
6. Now once you are in windows 7 we have to find a way of getting the bootloader to give us the option to boot into the incomplete installation of Windows XP Service Pack 2.
7. Fortunately a handy freeware application exists which makes this relatively easy. EasyBCD.
   

   Screenshot of EasyBCD

8. Install this application and then click the Add/Remove button, then add a new Windows XP menu item. After you have added it you may need to go to configure the XP menu item to use the correct drive letter. I did.
   Final Steps to Success
9. Now this is where the secret comes in, if you were to try and just reboot now and select the windows XP partition from the boot loader it would say there is no windows XP boot loader yet and the whole thing just wont work.
10. What I did was nip over to my laptop and copy across the essential files from my laptops windows XP installation to enable the other installation to boot and complete. Copy and paste these into the root of your incomplete windows installation (and then magic! you can use the boot loader to go and complete your windows XP installation) So far it all works correctly after that! Woo hoo!

To be helpful I have attached a copy of the files I copied and pasted from my laptops windows XP installation that were required to complete installation of windows XP on my new partition. I suggest you paste them in from windows 7 when you have completed the first stage of the installation and rebuilt the MBR.

Boot Files Zip File: windowsBootFiles

Contains:
Subdirectory windows (which represents the root of the windows partition file system – these files should be copied and pasted directly on to the root drive of your new windows XP partition NOT the windows directory which will have already been created by the XP install CD)

– AUTOEXEC.BAT
– boot.ini
– CONFIG.SYS
– IO.SYS
– MSDOS.SYS
– NTDECT.COM
– ntldr (the most important file)

The zip file here contains the boot files without the pagefile.sys and hibernation files as I didnt think these would be necessary and were quite big.

Hope this helps!