As I said, the Reinstall bootloader option should do the same thing that's done during the install process when you are presented with the default options for the bootloader, including a default bootmenu. It basically seeks all HDD's fr primary partitions. It then checks their type, which is generally a Linux Native or a Win partition. In the latter case, the tool adds a windows label to that partition followed by a number (so if you have a total of 2 primary windows partitions (not necessarily containing the /Windows dir) the tool ads windows1 and windows2 as options for the bootloader).
With the Linux partitions is more difficult... there are lot of files, so it checks and searches for the /boot directory (either in a standalone partition or as a /boot dir in a primary partition).
This way your default boot options are created. Or, at least this is how I would've done it
. The principle is the same. Why read data (posibly corrupt) from an existing install when you ended up booting from a rescue CD? Could it be because the user screwed up something in the config files and can't get the bootloader? So, the "failsafe" way would be to simply copy-paste the auto-detection routines from the installer to this tool, so you know you got more chances to get it up. LILO is used because it's considered failsafe. GRUB is more picky with the BIOS