1. To Create a New Partition from the XP Hard Disk Drive -

A) With your Windows 7 installation disc boot into the Command Prompt from the System Recovery Options screen.
NOTE: Make sure that the CD/DVD drive is selected first in the boot order in the BIOS.

B) In the command prompt, select and shrink the XP volume by how many MB (1024 MB = 1 GB) you want to have for this Windows 7 partition. (See screenshot below)
NOTE: You would do steps 2 to 9 in METHOD TWO at that link. Windows 7 will need a minimum of 16 GB (16384 MB).

C) Click on the X at the top right corner to close the command prompt. (See screenshot above)

D) Click on the X at the top right corner to close System Recovery Options. (See screenshot below)

E) Go to step 3.

2. To Use a Separate Hard Disk Drive than the XP Drive -

A) Boot from your Windows 7 installation disc.
NOTE: Make sure that the CD/DVD drive is selected first in the boot order in the BIOS.

3. Click on the Install now button. (See screenshot below)

4. When you get to this point, select the partition (step 1) or hard drive to install Windows 7 on. (See screenshot below)

5. Finish installing Windows 7.
NOTE: You would do step 9 on at that link to finish installing Windows 7.

6. When finished, restart the computer to have the option to boot from XP (Earlier Verision of Windows) or Windows 7. (See screenshot below)

1. To Create a New Partition from the Windows 7 Hard Disk Drive -
NOTE: If you want to install XP on a separate hard drive instead, then skip this step and go to step 2.

A) In Windows 7, select and shrink the Windows 7 volume in Disk Management by how many MB (1024 MB = 1 GB) you want to have for this XP partition. (See screenshots below)
NOTE: You would do all of Method One at that link.

2. Insert your XP installation disc, then restart the computer and press any key to boot from it when prompted. (See screenshot below)
NOTE: Make sure that the CD/DVD drive is selected first in the boot order in the BIOS.

3. From XP Setup, Press Enter. (See screenshot below)

4. Press F8. (See screenshot below)
NOTE: On some multimedia keyboards, you may need to press the F-Lock or Function key before pressing F8.

5. Select the partition (step 1) or hard drive that you want to install XP on using the arrow keys and press Enter.

6. Finish installing XP.

7. In XP, download and install .Net Framework 2.0 and EasyBCD.
NOTE: In XP, Net Framework is required to be installed to run the free program EasyBCD.

8. Run EasyBCD.
NOTE: This is required to repair the Windows 7 boot file and add XP to the Windows Boot Manager list.

9. In EasyBCD, click on Add/Remove Entries (left side). (See screenshot below)

10. In the bottom right section under Add and Entry, type Microsoft Windows XP (name displayed in Windows Boot Manager) for the Name.
NOTE: You can type whatever name you would like to have displayed in the Windows Boot Manager for XP though.

A) If you have a 100mb System Reserved partition with Windows 7, then right click it in Disk Management and give it a drive letter ( S is a good choice). Then select the letter you assigned (ex: S ) in the EasyBCD Drive drop down menu.

OR

B) If you don't have a 100mb System Reserved partition with Windows 7, then select the drive letter (ex: C: ) that Windows 7 is installed on from theDrive drop down menu in EasyBCD.

11. To the right of Type, select Windows NT/2k/XP/2k3 from the drop down menu.

12. Click on the Add Entry button. (See screenshot above)

13. You will now notice that this has added Microsoft Windows XP to the upper right section. Click on the Save button. (See screenshot below)

14. In EasyBCD, click on Manage Bootloader (left side). (See screenshot below)

15. In the upper right section under Bootloader Installer Options, select (dot) Reinstall the Vista Bootloader, then click on the Write MBR button. (See screenshot above)

16. Close EasyBCD.

17. Restart the computer to have the option to boot from XP or Windows 7. (See screenshot below)