I expect that you'll find that your hard-disk is divided into one big partition for XP.
Red Hat 7 is quite old, so I don't know if it will be able to repartition an NTFS disk as used by XP. Your best bet would be to get a more moden distribution such as Fedora or Gentoo (both of which can be freely downloaded and burnt to CD IIRC), or a live distribution like SuSE 9.2 evaluation.
Alternatively, there are utilities like Partition Magic that can repartition your disk before you start. You just need to make the XP partition smaller and leave the rest as unpartitioned space; the installer will take care of the rest.
If you can't afford Partition Magic, then you might look at gnuparted (http://www.gnu.org/software/parted/
) It's a Linux program, but it can run from a bootable floppy; instructions at http://www.gnu.org/software/parted/m...rted.html#SEC7