OS Installation

First of all C: and D: drive labelling is idiotic in Windows. It's way to confusing as well as unreliable. So you may have to rely on the size of the drives to truly know which drive is what.

So suppose you have 4 drives, each with following capacities (lets call them sd1,sd2 ...)
sd1. 40 GB
sd2. 30 GB
sd3. 50 GB
sd4. 60 GB

Now, when you install your first OS (call it Win 7), most probably naming conventions would be like this:
sda1: C:
sda2: D:
sda3: E:
sda4: F:

So, for Win 7, C: drive would be 40 GB, and D: would be 30 GB.
Now, if you reboot and try to install an OS in sd2 (lets call it Win 8), then for Win 8, the naming conventions would be like this:
sda1: D:
sda2: C:
sda3: E:
sda4: F:

So you see, you will have same drives shown in both OS, but most likely the C: drive for both OS would be different physical partitions. And, no, you can't share a software in both OSes (if that is what you were asking). But sd3 (E and sd4 (F would be shared among both.

See the attached file. They somehow created WIN7 on C: drive and Installed 2 XP's on Logical drives. How is it possible??/
Will both the XP see the logical drive as individual C: drive ???

what's the problem you are facing exactly?you should know by now that drive letters will be different when booting from different windows partitions & most likely whichever windows partition you boot from will be assigned the letter "C".logical drive is simply space allocated & it is the partition type which matters.i.e.primary partition.

I agree with you that it will show different Drive letters but i just wanted to know how can i format the hard disk in order to get the following result.(See attachment)

try this: first install xp on 1st partition then install xp again on 2nd partition & in the end install win 7 on 3rd partition.