Extended/logical drives always will start at hdx5. This leaves room for the max of 4 primary partitions in slots hdx1 - hdx4, and will prevent your logical partitions from changing later on if you add or delete a primary.
The problem I see in your lilo.conf file is the first line as show below: boot=/dev/hda1 ==>> boot=/dev/hda That will install the lilo boot loader in the MBR of the master drive, and give you a choice of the two OS's. You are currently trying to install it in the boot record of the Windows partition, which is /dev/hda1. Tom

