May be your mbr (master boot record) is damaged.
If you have the Windows XP CD, you should try
to boot with the inserted CD, and if booting fails
select the option Recovery Console, to repair
the mbr. Instructions from Microsoft here :
http://support.microsoft.com/kb/307654
As far as I know, it's easier to have Windows XP
already installed. before you try to add a
Linux installation for dual boot.
Concerning the second partition, you have to set
in gparted a disklabel for the new partition first
and possibly also set a boot flag.
You can also delete the second partition and
enlarge the partition with Windows with gparted, to
give the whole harddisk to Windows XP.
If you want a dual boot for Windows and Linux,
the Window bootloader would have to be modified, or
else the grub or grub2 bootloader would have to
be used and options for booting Windows included.
If you have Windows XP already, Ubuntu for example
could be installed from an Ubuntu live cd, which
would include partitioning and installing the
grub or grub2 boot-loader.
Another option with Ubuntu is the file wubi.exe,
which is on the Ubuntu CD usually and can be started
from inside a running Windows, to include Ubuntu
as a folder inside Windows. Look for more instructions
at the Ubuntu forum, here :
http://www.ubuntuforums.org/
Anyhow it is a good idea to install Windows before
adding Linux.
Regards
Fred