Follow what I tell you 100% and I can all but guartee a bootable linux partition. Take partition magic and clear off X amount of space from windows. Now you need 2 partitions at least, one linux native and one linux swap. Reboot, boot the linux install disk, I usually choose expert mode. Now when you get to the point where it asks you to dump lilo, tell it to install it on the linux partition, not the MBR. After the install completes reboot and windows should begin to load. After you're in windows go into boot magic configuration and it should see a linux partition, add it to the boot menu. Reboot and you should see the bootmagic boot loader. Choose OS

Let me know if it doesn't work!
edit: this means you are actually installing Lilo, it just won't be the main boot loader, and since it won't it shouldnt matter if its past cylinder 1024, etc.