Try also F8 with the WinXP choice in the menu. I know F8 brings the Advanced boot menu but somehow I was always able to find the submenu somewhere... seems ridiculous to point out but you may not be pressing F8 fast enough so it's intercepted when you're back to the 2 choices so you go to the advanced menu instead of a submenu... F8 has to be pressed a fraction of a second after pressing enter, before you loop back to the initial menu.

When I first read about dumping Iatkos to a hdd partition, there was also talk of using a logical partition instead of a primary one... so that can be tried also...

I hope you find a way!