I also have Windows 7 on a separate, connected drive...and that's not the problem.
Win 7 uses a different bootloader than XP, so you should be presented with a screen requiring you to select an operating system you want entrance to...when you boot the system.
The XP boot files have no reference to Win 7 and have been superseded by the Win 7 boot files.
If all those files failed to load...how did you get into XP...and what Event Viewer are you looking at?
What is the Source listed for the Event Viewer item?