Without entering too deep, lets just explain what booting a PC is all about.
When a PC starts, the first program to take control is the BIOS which is resident in ROM. After initializing most hardware in your machine, it will attempt to load a tiny program, either from the first sector of the floppy or the first sector of the first hard drive. This program is called the Master Boot Record or MBR for short.
The MBR of the hard drive will locate the active partition and again, will load the first sector of that partition. This sector contain a tiny little program which knows a little bit more about the internals of the OS living in that partition. It will proceed to load either basic components of the system or simply a more sophisticated boot loader which will finish the job.
The boot sector of a floppy may be compared to the boot sector of the active partition. It will proceed to load the OS living on the floppy.
LILO is fairly flexible, here is why
When installing Linux on a system with several OS (other than Linux), take this as a rule of thumb. Manage to install and boot all the other OSs first. They are less flexible. Linux will always find it way.