You can always format your Win7 partition to install whatever you like. But if you want to keep both, you have a handful of options--
1: Install WinXP within VMWare.
2: If you have two physical HDDs, disconnect the one with Win7, install WinXP on the oher, now connect both HDDs and select boot device from boot menu at each boot.
3: Install WinXP on another partition whence Win7 will be lost from list of OSes. However, you can boot from Win7 partition by using Super Grub Disk.
4: You can try installing Ubuntu as a third OS which installs the GRUB bootloader and see if Win7 is found on the list of OSes in the GRUB menu.