Have dedicated partition for each OS. But W2K8 creates a "system partition" which gets overwritten during subsequent windows 2003 install.
how to plan the install, so that both can co-exist?
Create the partitions before installing Windows Server 2008, and it will not modify the existing disk layout.
First install Windows Server 2003 in the first partition, then install Windows Server 2008 in the second one. The WS2008 setup will take care of all details for you, including setting up the dual boot.
If you're starting with an empty disk, use WS2003's setup to create the first partition and install WS2003 on it; then use WS2003 to create the second partition; then start from the WS2008 DVD and install WS2008 on the second partition; it will handle the dual boot automatically.
Yes, it's really that simple :-)