While you are in Windows 7, please provide us with a snipping tool picture of the Disk Management setup and use the paperclip from the advanced entries to attach. Also open an Administrative command prompt and type bcdedit and copy and paste the listing.
You might also provide the listing of the boot.ini file and the make sure the boot.ini and ntdetect and ntldr files are in the system partition.
It sounds like the boot loader is not being directed to the correct location for the first boot. There is something else I need to check on the ASUS site about seeing the splash screen twice, if you are seeing that.
BCDEDIT has to be run from an Administrative command prompt. Right click on command prompt and select Run as Admin, or use the Winkey and type cmd then CTRL+SHIFT+Enter. Then type bcdedit and after the entire thing shows in the window, and you may have to expand the window, right click and select mark. After Marking, hit enter and it will be useable to past to the forum, or put it in a text file first. Or use the options described below to copy and image of the window.
The Snipping tool is a Windows 7 accessory, like any other utility. You can use it to select a portion of the screen and capture. You could also just open Disk Management and use ALT+Print Screen, then paste into Paint and edit and save. After that, use the paperclip on the Advanced Reply option in the forum to select the file and upload.
Well, I have to say, you certainly have an interesting Disk Management presentation...
Did you set up all of those partitions? Do you actually use them for separate data?
I do not see the XP boot entry in the attachment. Probably you are getting misfires because the system is having to look for some place to start up or had to reboot to start over to load the other OS. You can use a utility called EasyBCD to set up a dual boot in Windows 7. It will add a "Legacy" entry in your boot list for XP.
Windows 7 is a fairly large OS compared to what you might be used to. I do not know what the minimum partition size recommended for use with Windows 7, but I would guess something larger that 50 GB. 40 GB may work, but it would be close if you install the normal type of software.