Howzit
There is a small prob with your config file both your linux part and Xp are pointing to the same place therefore it will not work. U have to follow some steps here is a link that might help with a example of the grub.conf file
http://www.geocities.com/epark/linux...2k-HOWTO.html. some guid lines is that u must id what is your windows partition and what is your linux partition.
here is a example of grub please take a look at the windows section and compare
# grub.conf generated by anaconda
#
# Note that you do not have to rerun grub after making changes to this file
# NOTICE: You have a /boot partition. This means that
# all kernel and initrd paths are relative to /boot/, eg.
# root (hd0,1)
# kernel /vmlinuz-version ro root=/dev/hda3
# initrd /initrd-version.img
#boot=/dev/hda2
default=0
timeout=10
splashimage=(hd0,1)/grub/splash.xpm.gz
title Red Hat Linux (2.4.7-10)
root (hd0,1)
kernel /vmlinuz-2.4.7-10 ro root=/dev/hda3 hdc=ide-scsi
initrd /initrd-2.4.7-10.img
title Windows 2000
rootnoverify (hd0,0)
chainloader +1
cheers