I am using WinXP VM on a Win 7 host.
After installing a Slackware Linux VM, the win XP VM is broken.
Assuming the Linux VM is a totally separate VM then I fail to see how creating a new seperate VM of any OS would cause an issue with an existing separate VM. By separate I mean not have touched the existing VM in any way while create a new separate VM, as in not attaching an existing virtual hard disk from another VM, etc, As a matter of fact in over 10 years of using VMware products and having created thousands of VM's I've never had a previously created seperate VM corrupted by creating a new separate VM of any OS! 
When starting the machine a Bad Image blue screen message is displayed
I'm not sure what help you expect to get from the information you've provided as saying just "When starting the machine a Bad Image blue screen message is displayed" is about worthless from a diagnostic/troubleshooting perspective. Even a screen shot of the BSOD would probably be more helpful then your description thus far. You need to include technical details/facts, something that is actually analyzable!