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You may run into some problems if you do this but it can be done - in its own partition. Do you have Win 7 Pro? Will you be happy running XP in a virtual environment?
You will need to repair 7's bootloader after you install XP so that you then have the option to start 7 or XP, otherwise you will only be able to boot XP.
It is much easier to implement an XP VM using Windows Virtual PC, which is free as is a copy of XP for it. I have several set up as sandboxes on my W7 installation.
Performance is a bit slower, but if you can tolerate that, it'll be much less of a headache.
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@Cryptic...I have w7 ultimate....actually i wasnt to use XP since I cant just maximaize Turbo c++ to full screen in w7 and this irritates me alot...
@Cryptic ad Jatuba...I just thouht I can simply install Xp in E or F(w7 in C)...will it really create any problem??
Yes you can do that. We were simply suggeting the easiest wats to do it first because when go to trouble, headache and potential data loss if you don't have to. If you really must have a dual-booting 7/XP setup you can try this: http://www.sevenforums.com/tutorials/8057-dual-boot-installation-windows-7-xp.html