I have not got wubi to work on 3 different system I have tried.
The first system (a HP pavilion laptop core2duo) refused to boot windows xp. It would seem to find NTldr, but the boot up process would freeze just after that. Went away as soon as I fixmbr, fixboot. I could get to ubuntu ok though.
Second system a desktop PC (sata2 HDD, amd4800+x2, A8NSLI) loads windows XP ok, but fails to load ubuntu claiming it cant find a partition. After this if you select winxp without rebooting, it cant find ntloader. I can run windows XP fine though.
3rd system completely fails to even find a master boot record at all after wubi installed, it is a xp2000+ ga7dx with IDE 120gb drive. Had to fixboot/fixmbr to get windows to boot again.