Invalid BOOT.INI (dual boot XP with 7)

I would let the freeware tool EasyBCD try and fix this for you.

Boot into XP/Vista/7/Ubuntu/OS X and more! Boot from USB, Network, ISO images, Virtual Harddisks (VHD), WinPE, and more! Repair the Windows bootloader, change your boot drive, create a bootable USB, and more! Rename entries, set default boot target, change BCD timeout, hide the boot menu, and more! Create your own custom boot sequence, hide drives on boot, backup and restore configurations, and more!

It seems like the repair isn't showing up because the CD doesn't see the XP OS.

1.Boot with your custom XP CD with drivers.

2. Press R to load the Recovery Console.

3. Type bootcfg.

4. This should fix any boot.ini errors causing setup not to see the XP OS install.

5. Try the repair install.