It might work for some programs, but has a real potential to cause great trouble.
There is no problem with installing in both XP and Win7 a product into the same disk E. However, the problems I can see are :
- Some installations will install only the software that fits your operating system.
This means that one installation may destroy the other.
- Some applications keep their data and settings in directories such as
C:\Users on the boot disk.
You would then have separate directories, for example for saved games, and would need to find where
they are and to always juggle copying files between the two systems.
- Products that use the registry might experience problems,
since each Windows version has its own registry.
- For very large products that modify heavily the system, such as Microsoft's Visual Studio,
there is also the chance of breaking the system, thus requiring the reinstallation of both Windows 7 and XP.
In short, there is a good potential for big headaches, and you would need to find out the hard way
for which products this common disk scheme works or not.