I only get a blank screen with flashing cursor when I try to use partition running windows xp. How do I recover?
Your Lion operating system does not support XP. It only supports Windows 7. Did it not tell you this when you used Boot Camp Assistant to partition your hard drive? It also says Windows 7 is required in the Boot Camp Installation Guide http://manuals.info.apple.com/en_US/boot_camp_install-setup_10.7.pdf .
Black screen and blinking cursor is what I got trying to install Windows 7. Appears to be Windows's boot record getting corrupted (by Windows's own installer apparently !).
I found the fix in the window's install disk. Look here: http://support.microsoft.com/kb/927392
This is valid for Vista & W7, I would believe the tool also exists on XP install disk. If not you can always download and burn a trial Windows 8, it is free.
Get to the terminal from windows disk then:
1) go to your XP partition (usually c:) and execute
2) go to the boot partition (usually d:) and execute
Lion lets you install XP but BootCamp utility does not download support apps for anything else than Windows 7. Maybe using an older version of BootCamp would do the trick.