i've had it work with grub on the second primary partition.
i used to have a first partition for windows, then a second for linux and then the exted ones. after some system fixing i finished to have the / on hda1, xp on hda2 and the other linux parts. now i'm fully happy to be with /boot to hda1, / on hda2, swap /hda3 and the other parts on lvm2 after removing winzoz. i had only needed a functioning wireless driver, but since i wasn't able to get one in more than one year, in the end i finished getting another wireless device.
anyway, on my system having windows on hda2 or even on extended didn't bothered grub.