The boys are right, 2 gig is way too small to put XP on....use at least 5 but more like 15 or 20 gigs. In fact if its your primary OS, use most of the drive for XP. Back up all your important stuff to a file on another hard disk would be the best way to do it. Then format and repartition the 60 gig. Depending on what version of Linux you are using, if its newer, the GRUB boot loader (Redhat linux 8 has it, Im pretty sure 7.3 uses it too) will dual boot into XP/2000 and linux. If you are a newbie to the dual booting, you might want to consider another alternative. Or you could back up your data onto a 2nd disk, install XP on the 60 gig, then restore the backed up files from the 2nd disk to the 60 gig, then use the 2nd disk as your linux disk. Install linux onto the 2nd disk (setup as a slave on the primary controller or a master on the 2ndary controller), install linux on it, use GRUB as the boot loader, allow it to overwrite the master boot record, and it should dual boot into either OS. If you mess up and destroy all bootability, and you want to get back into XP without reinstalling, you can boot off the XP cd, select RETORE/RECOVERY mode and type FIXMBR at the c: prompt. That will fix the master boot record and allow you to boot into XP and ingore the Linux os altogether. MAKE SURE WHEN INSTALLING LINUX THAT HAVE THE OPTION FOR MAKING A BOOT DISK SELECTED. I say this because if you replace the MBR with FIXMBR as previously stated, you can still use the Linux boot disk to boot into Linux and bypass the MBR on the primary disk altogether and some semblance of dual booting will still work.
Beck