I am doing that, but I have 3 partitions on my HD. One with XP, one with all
my files (My Docs), and the 3rd with Vista.
You will want XP installed first, and then install Vista. Vista's boot
manager will controll which to boot into. If you want to make changes, you
will have to boot up Vista and go through the My Computer options and edit
them in the boot manager there.
The setup works fine, but I do recommend you at least have 40GB partitions
for Vista, XP, and larger for your files.
I have 2-120GB drives in a Raid striping array (240GB drive) with XP-40,
Vista-40 and ~125GB for my "files" partitions. That way, which ever OS you
boot in to it's easy to find your docs. And with the 40GB OS partitions, it
leaves room to install programs for each OS.