Yes, you create an extended partition with 'e'. You then create logical partitions with 'l' (if you use all 4 primary's, it automatically select logical partitions). The remaining two primary partitions can still be allocated.
If you install LILO on the root partition, then it's just a question of getting the FreeBSD boot manager to "chainload" it. I can't remember how to do that offhand, but the docs should explain it.
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