My setup was a bit different, one of my partitions was windows, and my spare drive was SCSI, but I just made sure that LILO had both specified, and was written to the mbr of hda. Then it worked without problem. (This was with Mandrake 7.0, but it shouldn't matter).
OTOH, as a work around, until you get the final answer, you could make two separate boot floppys, one for each system that you want to use.
I'm actually about to encounter a close match to your exact situation. I intend to create an emergency copy of Linux on a 2GB Jaz disk. I figure that this should allow me space for plenty of tools. And my current plan was to figure that I would be booting from a floppy. Well, it's an emergency system, so that's perhaps a bit more acceptable, but my thought was that after the thing was built, there should be an disk that had the option of which system to boot. But I don't think that this could be built until after both had been booted after the second install. So I expect to make several temporary boot disks before I get the final lilo working.
One thing I've never had reason to check was whether the new lilo's/grub's are compatible with the old kernels. I assume that they are, but don't know for certain, so you might need to check that out. You could just be stuck with floppy boots for one system or the other.
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