I have never had any problems with lilo and Windows XP. Just with WinXP
.
The mandrake install program should have setup your lilo to dual boot, but windows may have not liked it. I hope that you read through the documentation for mandrake before resizing your XP partition and followed its advice (ie defragmenting the drive to get everything at the beginning).
I ran into this problem a year or two ago when I installed WinME on top of XP and I had to reinstall all the XP boot files.
Here is how I would recommend fixing it (its probably not for the feint of heart):
1 - Boot up with your XP cd and goto the rescue console (if for some reason you are not using NTFS for your windows drive, you can do this from within linux).
2 - Check to see if NTLOADER.??? is in your root directory of C: (you may need to use attrib to see it. If it is not, browse through (cdrom):\i386 for NTLOADER and copy it to C: and change its attributes to hidden and system (if you dont know how to do it, type in help attrib at the prompt)
3 - If its there, try making it not hidden/system. Sometimes windows does the funniest things :-/
4 - Reboot and check if windows will boot.
Failing that, I would suggest that you familiarise yourself with your mandrake boot cd and then reinstalling your windows boot sector using lilo to see if windows will boot up without lilo. If it doesn't you would probably have to reinstall windows (if you know your windows, you could check out all your windows boot files and fix them) and then reinstall lilo using your boot cd to get back mandrake.
Hope it goes well.