If I understand correctly, you now have:
c - 2 gb extended (for data)
d - 10 gb primary (ME)
e - 25.4 gb primary (XP).
I *think* you have to have your active primary partition in first place on your hdd, so you should put your 2 gb data partition at the end of your hdd, not the beginning, ie change your hdd to look like:
c - 10 gb primary (ME)
d - 25.4 gb primary (XP)
e - 2 gb extended (for data).
Partition Magic will do this for you (wonderful program).
You should have been able to use the advanced install feature of XP to install a dual boot. You could always use Boot Magic (which might be included in your copy of Partition Magic, dpending on what version it is).