I would go the Recovery Console route, dude. No sense in confusing the issue. That's what it's there for.
It shouldn't change your settings. What settings are you referring to, anyway? The only thing you should see is the XP Boot Loader vs. Lilo.
If, for some reason, you get an errors, or if your boot.ini file turns out incorrect, guess what? The recovery console has a utility to fix that, too. It's called Bootcfg. Again, don't use it if you don't need to.
Ok, here's what I found from a Linux site about removing Lilo:
Removing LiLo, GNU GRUB and GNU/Linux
Uninstalling Linux and getting rid of the boot loader are two different things.
The best way to proceed is to delete the Linux partitions from within Linux using either 'diskdrake' or cfdisk /dev/[device] ('device' usually being 'hda' or 'hdb'), then booting into the other operating and cause it to reinstall its boot loader. In DOS/Windows (Win95/98, that is) , that would be achieved by issuing the command
fdisk /mbr
which replaces LiLo or GRUB with the Windows boot code. In Windows 2000 / XP you would boot into the 'system recovery console' and run these commands:
fixmbr
fixboot [drive]
command (with 'drive' being the 'drive letter' of the system partition). That's all.