Sorry if this is a little lengthy - trying to explain it all 'briefly' isn't always possible...?
The basic/core/'text-book' approach to a dual/multi-boot for all M$ OS is to have a small C: (active) primary (system partition - where 'only' the OS boot/start-up files reside.) The actual OS (in each case) goes into a separate logical-drive; each OS has its own 'drive' as I indicated earlier.
Each OS is thus insulated from the predations (intrusion/affects) of the other(s); each 'drive' can be reformatted without affecting the other 'drives'; each OS can be re-installed without affecting the other(s) - apart from the problem that '9x/ME will overwrite the NT, W2K, XP boot-loader - whichever one is current.
When running a dual/multi-boot with NT/W2K/XP boot-loader involved, the boot sequence goes looking for the associated boot-files for the chosen OS; these 'have' to be in the active primary - otherwise no boot to that OS! Once it has found those boot-files it will (all being equal and correct) know where to go for the actual system (OS itself) files and thus boot up correctly - this info is contained in the boot.ini; it is dependant for its success on the boot-files for the chosen OS being in the Active Primary partition. This applies equally whether or not each OS is in its own space; is (also) in the active primary; is even on a separate/second HD.
Some other points to be familiar with re dual/multi-boots and re-installs of an existing OS, or adding another. Useful to know/understand… - 'cos it can be a little confusing initially when getting to grips with the theory around dual/multi-boots...?
Presuming you had a standard dual/multi-boot - with each OS in its own 'drive; nothing in the C: partition apart from all required boot/start-up files.
If you had a '9x/ME + NT system and re-installed '9x/ME then you would need to run NT repair to restore NT's boot-loader. ('9x/ME would have overwritten the NT boot-loader.) If you re-installed NT then the NT boot-loader would be be preserved, along with the dual/multi-boot.
If you had '9x/ME and W2K - and re-installed '9x/ME then same problem/resolutions
If you had NT and W2K and re-installed NT then again you would need to run W2K repair routine - NT will overwrite the W2K boot-loader. If you were to re-install W2K, again the dual-boot would be preserved.
If you had '9x/ME/NT/W2K + XP then re-installing any of those earlier OS would overwrite the XP boot-loader - thus requiring the XP Repair routine to restore it. An XP re-installation would preserve its own boot-loader and the dual/multi-boot.
Essentially the older the OS (or one that does not include a built-in boot-manager) the more likely it is to overwrite the boot-loader for a later OS that includes a dual/multi-boot option (i.e. one that has a 'built-in' boot-manager). NT/W2K/XP all have a built-in boot-manager; DOS/'9x/ME do not...
Also again, it is preferable to install oldest OS first, newest last.
Other options - but not ideal, although they will work...
You 'can' put one OS in the active Primary, alongside the boot-files for 'all' installed M$ OS/s; and the other OS/s in separate logical-drives.
You 'can' put two (or more) OS in the same partition, i.e. the active primary can have two OS/s + all other OS boot/start-up files present; the other OS/s being in separate logical-drives.
You can even have three in the primary - but it gets a little crowded...
(The Dell XP P2/233 I'm using for this has '95c/NTWs/NTsvr in C: ; D: = data; E: = NTSvr (ntfs); C: and D: = fat16. It works but things have gotten a little crowded on C: and D: over the last 3/4 years...)
The problem with this 'shared' primary approach is that the file format for C: (active) primary partition will be dictated by whatever OS you are intending to install there. The active Primary partition 'has' to be a file format common to all installed M$ OS; if an intended OS cannot 'see'/use the file format chosen for C: , then it will not install successfully - if at all... The only common format across the entire M$ range = fat16; and this has a limit of 2Gig for all DOS/'9x/ME; NT/W2K and (presumably XP) can handle 4Gig as fat16.
Also if you have to reformat the C: partition because of some major 'snafu', then you will lose 'all' boot/start-up files for 'all' installed OS - and thus no boot to anything until you get an OS back in C: and/or do some recovery work for the others. A simple re-install of an OS in C: - without resort to reformatting will 'not' lose access to the other OS/s - within the constraints imposed by NT/W2K and XP.
If one was to go with C: = fat16 then the max partition would be (down to) 2Gig - if DOS/'9x/ME present; if no '9x/ME/DOS present then it could be up to 4Gig.
If no DOS/NT/95a present then it could be fat32 - and obviously larger than 2Gig... (DOS/'95a/NT cannot 'see' fat32)
You get the idea - and see the irritations of having to consider formats when putting an OS (or 2/3) in the primary along with the boot/start-up files? Better not too when you can avoid it?
As regards putting more than one OS in a given partition/logical-drive; the determining factor where is just what file format you use; as you have rightly twigged/noticed - this is an issue to consider carefully? Logically it has to be one which all OS in that partition/'drive' can use…; fat32 is more efficient cluster-wise than fat16; ntfs more so and also offers greater security over fat16/fat32 - you takes your choice - based on which OS/s are going where and why.
Hope the above helps clarify it all somewhat?
If you browse posts: 21665 and 21647 on the W2K forum pages there is another slightly more detailed (and different?) how/why of dual-boot; covers dual-drives as well.
As I suggested in my earlier post, I'd be inclined to start afresh - and go along the standard/core lines? This will give you maximum stability; each OS secure; allow for further additional OS (or duplicate versions of current OS) to be installed.
I think you have enough self-study by now???
Need more input - post back?