I decided to keep trying my hand at Slackware and after removing the WinRE partition I have now successfully got Slackware up and running. But there are still a few problems.
The lilo installer keeps hanging both with superblock and MBR options. When I removed my WinRE partition booting into Win7 is also not possible. Using the Slackware install USB pen I can boot Slackware with "huge.s root=/dev/sdb1 rdinit= ro".
So I downloaded Grub 2.0, compiled it and installed it. Booting now gets me the GNU Grub 2.0 screen with the Grub> CLI. So I need to get a Grub menu.lst. I tried using the grub-mkconfig and placing the result in /boot/grub/menu.lst but that didn't help.

I am a bit lost so any help with setting up Grub would be very appreciated.

Unless the WinRE partition was also used as the Windows boot partition, it shouldn't have made a difference, but that may have been the case. You didn't mention before that you were KEEPING Windows installed, or I wouldn't have recommended getting rid of it. You can run bootrec from the Windows DVD to repair the Windows boot issue. Once you have Windows booting you should be able to install Grub from a Linux live CD and get a grub menu to boot both. If you had gone with a distro like Mint this would all have been done for you. Setting up dual boot on Slackware is much more difficult, as you see.

Setting up dual boot on Slackware is as easy as setting up dual boot on any other distro. You keep saying that you don't want to evangelize people to any distro, but are actively driving people away from distros that you feel are to difficult for new users. That is quite contradictory.

@Thyem: Grub 2 doesn't use a menu.lst anymore. You have to put the result of grub-mkconfig to /boot/grub.cfg, just use the -o option like this:

guyonearth
Your assumption in post #15 is that every new user coming to linux should have Windows/OSX replacement to start with.

Thyem:
I would strongly suggest you to seek help in Slackware subforum as we are getting into specifics here now.

guyonearth
If you don't like/can't run Slackware, don't put other would-be users off trying it.
Speak for yourself. It was the first distro I installed, tried a few others, but found Slack suited me best. Don't generalise.
No, as you would have people believe. You may have had difficulty, many haven't.
It might not look as good as some GUI installers, but it works. What's confusing about cfdisk?