I searched around on the forums abit and I couldn't find a thread which would solve my issue.
So...here's my problem.
I've got 2 Windows partitions, 1 Ext3 partition with BackTrack 3 installed and Linux swap.
I installed BT3 from a LiveCD. Copied the lilo.mbr from sda7 (BT partition) to C (Windows partition), added BT3 to boot.ini and rebooted.
Problem is, at OS selection screen I can select BT3 just fine. But after I select it, screen goes blank for 3 seconds (not a surprise) and then it gets me back at OS selection screen thing. I can boot in XP fine.