Can I continue to use Win XP in Boot Camp when I upgrade to Lion?

The bootcamp partition is not affected. The only thing Apple did different in Lion is that the bootcamp drivers packaged with Lion installations only work with Windows 7, however, if you already have the Snow Leopard drivers installed on you XP side nothing will change...if you need to install a new bootcamp partition you will need to get the bootcamp drivers from your Snow Leopard DVD.

This may have been a problem during the Lion install when it resizes the partitions on the drive, it may have screwed up the XP partition when installing the Recovery Partition...this should only be a problem if your drive is almost full...I have a setup similar to yours (SL on one partition, and XP on the other under Bootcamp) I had 450GB free...I didn't have any trouble.