The instructions from here are quite clear.
It is preferable to install XP first. If you install W7 first XP overwrites the boot record and you'd have to fiddle about with boot managers.
You can created the partitions during the install of XP by telling it how big you want the partition to be during set-up. Alternatively you can install on the whole disk and create the W7 partition later with free partition manager software,
I'm sure this project will keep you happy for hours !