Hello xpro, welcome to NST.
First of all, I need to mention that its easier to post screenshots here using the "Manage Attachments" feature in the new post area, when you make a new post on this forums, which you will see if you scroll down on that page. Its generally easier than using external sites like imageshack, and then posting links to them, which as you can see, didn't exactly work...
Your problem is you adjusted the XP entry with "Change Settings". You were not supposed to do that! EasyBCD points the BCD entry at the "active" "system" partition (which you can find out which one that is from Disk Management), not necessarily the XP partition, which is where the BCD entry needs to be pointed. Boot.ini is what will point at the XP partition.
So go ahead, delete the XP entry, get EasyBCD 2.0 Beta, and use it to re-add the XP entry, this time making sure to not change where its pointed. When you add the new entry with EasyBCD 2.0 beta version, it will give you the option to allow it to auto-configure boot.ini, so you wont have to. So, at that point, hit Yes.
Next, copy over NTLDR and NTDETECT.COM from the XP partition into the "system" partition. (Note: with Win 7, it is possible the "system" partition is a hidden partition which you will need to first give a drive letter before you copy the files over)
Then you will have a dual-boot.