When you try to install Linux after shrinking the existing partition schema with a preloaded OS you may get the following error after installing GRUB
Error 12: Invalid device requested"
You can flag the windows partition as bootable via fdisk and then write this in the grub.conf file:
title Windows 7
rootnoverify (hd0,1)
makeactive
chainloader +1
Save the configuration and restart the system
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