Do you have a bootable redhat CD? If you pop that into your CD-ROM and boot up you should be able to get to a "boot:" prompt. Type:
or whatever your root partition actually is. This should get you into Linux so you can modify your lilo.conf file to give you choices at boot time--provided of course that you installed LILO to the MBR. Also, once you get in, you need to recreate your boot disk so you have one that works (I know you've done this already). It sounds like the one you have is no good. What command are you using to make a boot disk?
The best solution would be to get rid of XP and donate the additional 60 GB to RedHat or another distro or 2, but it doesn't sound like you want to do that
Another possible solution is to reformat your drive completely, then set your partitions up. Once you've got your partitions, you could then assign your XP partition, then your RH partition. Then, you could reformat your RH partition and install RH back on it. This is a slightly longer way to do it, but I think it should work. I would first try the RedHat CD and see if you can get back to command line. If so, you should be good to go. Just edit the lilo.conf file to reflect both Linux and Windows, make sure it's installed to the MBR, then type:
after you've made your changes to lilo.conf (rerunning lilo kind of "saves" the changes so to speak). When you reboot, you should have your choices of WinXP or Linux--hopefully you'll choose Linux.