I recently installed Windows XP Tablet ed. on a 30GB partition of my 100GB laptop drive. I then installed Ubuntu on another 30GB partition. I also have a 90MB partition (which i planned on using for boot) and a 3GB swap.

I planned on using the remaining ~40GB for free space fat 32 to share between each OS. However, I cannot create another primary partition. I tried in Windows XP to create and format the free space. It messed up my MBR and could not get back into anything. I had to restore my MBR backup from USB stick. Linux wont even touch the remaining space in qtparted. Any ideas on how I can use put this waste of free space to goo use?

you probably already have 4 primary partitions, and that is the limit...
suggestion would be to erase the swap partition
create an extended one
and place the new swap part. and the share partition in the extended part as logical partitions.