What happens when a boot loader like XOSL starts? It SEES ALL partitions on ALL drives, and can load ANY OS from there. In the case of Linux, it subsequently runs that partition's boot loader (lilo or grub).
Sounds like Lilo is a bit of a cheat as opposed to a real boot loader as it "loads" a pre-compiled file, as opposed to actually reading a file (kernel) on a partition?
I like the "petitboot" boot loader that is used on the PS3 when it is running Linux. My PC uses XOSL, which I wish would be developed further as it is a really nice boot loader. The best IMNSHO.