There are several ways to do this .
One is to install on the same drive , and use a bootloader to select the OS you want to boot to
The second option is better , and hardware based . Some BIOSes let you select a drive to boot from as you start . In this scenario you have the OSes on seprate hard drives
But mostly this is totally unnecessary because any program that needs win xp 32 bit to run will also run on 7 64 bit