They are both going to want to use \WINDOWS as the folder name-- obviously you will need to change the name for one of them (I'd suggest changing XP's to \WINNT since that is the name that was used by older versions of the NT family (NT and 2000))
Installing two OSes on one partition is possible but is officially not recommended by Microsoft (or myself!) http://www.microsoft.com/windowsxp/pro/using/howto/gettingstarted/multiboot.asp
http://www.microsoft.com/windowsxp/pro/using/howto/gettingstarted/meandxp.asp
It's best to partition the drive-- either by wiping it and creating partitions, or using a 3rd party tool like Partition Magic (costs $ but easy) or Ranish (free but complicated)