To include boot from CD in Windows XP/7 boot menu eventually look for "grub4dos".
The method is called chain loading of another boot manager/loader. This method works only for BIOS firmware. (On UEFI firmware there are other solutions.)
Grub4dos has its own configuration file where you can specify what device or OS you would like to load. Grub4dos allows booting to almost anything bootable.
Windows 7 boot files and Windows XP boot files differ significantly - Windows XP (ntldr+boot.ini) were replaced by (bootmgr+BCD+winload.exe) in Windows 7!
Didn't realise they were that different. Thanks for that tip. – Stewart – 2016-01-27T10:36:49.323