At this point, you should see your C: partition. Press D to delete this partition. Press L to confirm the deletion of this partition. Now you'll have your entire hard drive as unpartitioned space.
Press C to create a new partition. Do NOT use your entire hard drive space when creating this new partition. For the purposes of this article, we are going to assume that you are only installing one other operating system, and so we're going to divide your current hard drive space in half. Enter half of your current hard drive space in MB for the amount of space for this partition.
Note: 1 GB = 1024 MB Ex. You have a 320 GB hard drive, and you want 160 GB on each partition: 163840 MB
Repeat this process one more time to setup the second partition which will house your second operating system.
Note: If for any reason you want more than two partitions, repeat the process with the appropriate amount of space for each partition, but remember to house at least 10-20 GB for each operating system.
Choose a formatting option. Most people choose to format the partition by using the NTFS file system. Allow each partition to format, and continue installing Windows XP to the first partition, marked C:/.