To see if changing the grub menu.lst file is going to make windows boot, type this into the grub command line:
As is, and press enter after each line.
If it works, then that (except for the boot keyword) needs to go into your menu.list file.
To edit it, do this:
Bring up the run dialog by typing alt+F2
type: sudo gedit /boot/grub/menu.lst
Scroll to the bottom of the file, and add it there, along with a title line like:
title Windows XP Boot
Save, close gedit, and reboot. See if you can select it on the next reboot.
As a bit of a long time linux geek, I began to realise that one of the important, and rarely stressed points about linux: The error messages are actually important - chuck them into google, and see what comes up, sometimes prefixed with the distribution you're using as a keyword.
Personally, where possible, I have one harddrive for Linux, and one harddrive for windows. It just makes things so much simpler as operating systems don't go postal on each other, and tend to play nice, and save me anguish.