Which should I install first, Windows XP or Windows 7?
Although the recommended method is to install XP and then Windows 7, there is no need to reinstall in your case.
Follow this guide (edited below) using a free tool called EasyBCD.
Download and install EasyBCD. Click I Agree to the license agreement, click Next to install in the default location, and the installation wizard will do the rest.
Click View Settings.
Change the Default OS to Windows 7. The operating system to associate the settings with should be Windows 7 too. Select the drive on which Windows 7 is installed under Drive. Type Windows 7 in the Name box and press Save Settings.
Click Add/Remove Entries.
Under Add an Entry, choose the Windows tab. Select the drive on which Windows 7 is installed. Type Windows 7 in the Name box and press Add Entry.
Under Add an Entry, choose the Windows tab. Select the drive on which Windows XP is installed. Type Windows XP in the Name box and press Add Entry.
Exit EasyBCD and restart your computer to be presented with a multi-boot option screen for Windows XP and Windows 7.
Install XP first. After that install 7. When 7 is installed, its bootloader will also recognize XP; that way you'll be able to boot in both operating systems without needing to do anything else.
Why do you need to dual boot XP? If you have Ultimate just install Windows 7 then install XP mode in Windows 7 and it's all virtualized. Unless you have some specific reason for it which you could add to the question.