In Win7, use partitioning software (e.g., Partition Wizard) to create a second primary partition from unused space on your existing HDD, set it active. Then boot to your XP media to install XP on the new partition. After completing the install, boot your Win7 installation media to recover the MS bootloader, which will then offer you the option of booting to either XP or Win7 after POST.
Or you could just insert your XP Disk and restart your computer. It should automatically boot from your disk in the bios but only if, you have your boot priority set to cd rom device as your first boot option. That can be done in your bios. exit and save your settings. If its a real copy of Windows XP (manufacturer Disk) it will boot up before entering windows 7. Make sure you save all the info you want to keep before doing this, save it to a flash drive or cd/r or rw.
Once you get up and booted from your disk, do a clean install, Delete Partition, Create New Partition, Then push enter to Format and install XP.