Use that Compatibility Wizard that's supposed to allow XP to emulate a 'real' DOS environment for your older programs.
Or get DOS 6.22, PowerQuest PartitionMagic, and optionally Windows 3.11 for Workgroups, and make a 500Meg to 2040Meg primary partition at the front of the drive. Format that as FAT16, set it as the Active partition, and mount DOS622 on it and (optionally) Windows 3.11. Finally, set up the boot manager in PQPM and use it to select the DOS/Win or WinXP partitions depending on whether you want to run the DOS games or WinXP. Good luck finding 16 bit DOS or Win3.11 drivers for your video and audio devices - or for your network. A second 2GB FAT16 extended partition somewhere on the drive would allow you to download stuff to the HD in XP to share with Win 3.11.