Quite unusual circumstance you describe above, and I can buy into it providing it is a very old program, but I have even manage to run 16 bit DOS based programs in XP that normally don’t behave that well by using the advanced options and instructing it to run in seperate memory space under the advance properties under the icon created. This was back in the day when we used those things called 5 1/4 inch black floppy diskettes
Current windows based program, I would have troubles visualizing a program that would misbehave that much to require a seperate, but same operating system. It would have to be really an off the beaten path type of program to have the need for totally seperate settings on XP
Only other time I could even remotely see the need for a seperate operating system is running 2003 and 2007 office suite simultaneously (like you said, programs don’t play well with others), but even then, I got mine to run off of two different drives under the same operating system.
It does make a mess of files association in the beginning (and other erratic behaviors between the two programs) as I wanted 2003 for my Word documents and 2007 for the remainder programs (yes Dami, I know you can default 2007 to 2003 format of doc rather then DOCX and make it fully compatible, yada yada yada).
In the long run, gave up 2003 and stuck with 2007 as it was too messy, and I didn’t have that burning need to multiboot.