You will not be able to repartition the separate partitions with the software in Win XP. The best you can do is format the partitions as fat32 or ntfs. You can use partition Magic to combine the partitions back into one partition.
To remove Lilo you need to use a DOS fdisk program to rebuild the master boot record with this command (from a DOS boot floppy):
I use a plain Windows 98 boot disk to do this. I have done this with 2 windows XP computers and had no problems with them. They booted into XP normally after rebooting the computer.
Here is where you can make a bootable CD for DOS.http://www.bootdisk.com/popfiles.htm
You can also use a Win XP cd to load the recovery console and do a fdisk/mbr from there.
Boot from the windows XP CD, press the "R" key in the setup in order to start the restoration console. Select your windows XP installation from the list, and enter the administrator password.
Enter the command: "FIXMBR" (without the quotes) at the input prompt and confirm the next question with a "Y" (without the quotes). Use exit to restore the computer.