This is what I do on my laptops to get them to dual boot between Linux and Win2k.

Partition your hard drive such that there is a 20MB primary partition at the begining of the drive. Then partition out space for your XP installation (primary partition) and your linux installation (can be primary or logical). Hide the first 20MB partition and the linux install partition and then install XP. Once XP is running properly, unhide the linux partitions and start your Linux installation. When installing Linux, use the first 20MB partition (typically "hda1" on IDE setup) as "/boot". This allows you to put the rest of the linux installation where ever you want and not have any boot problems. DO NOT install LILO in the MBR. Install it in the the 20MB partition instead. Make sure you create a boot disk during the linux installation process just in case. Then follow the instructions on this site to configure the XP boot loader properly.
I also use VMware on other computers that have fast CPUs and lots of memory which allows it to work very well. It allows me to run Win2k and Linux at the same time on the same PC, but it is an expensive product. YMMV

Cheers!
Dave