It's possible to set a dual/multi boot with several OS.
At boot time, you'll see a new dialog asking you to sellect whitch OS to start.
A multi-boot setup can run different versions of Windows, and/or Linux, any distribution.
The alternative OS can reside on a partition of the main drive or another physical drive. You'll get beter performances using an internal drive, but an external drive should also work.
You should note that Windows XP is a 32 bits OS while it's very probable that you have a 64 bits CPU and Windows 7 64 bits. It's not a problem, it's just that Windows XP won't be able to use more than, at most, 3.5 Gb.
It's also possible to set a virtual machine that will run Windows XP in parallel with Windows 7.
For that, you need to install a Virtual Machine (VM) application, in that virtual machine, you install Windows XP as a guess OS.
There are several VM available. Do a search for "virtual machine".
Electro, May 2013