After long time I've somehow managed to install three OS'es (FreeDOS, Icaros and WinXP), it's not perfect solution but it works.
1. Install FreeDOS
2. Install Icaros
3. Install WinXP - this will wipe out GRUB, so you won't be able to start Icaros but Windows will properly detect FreeDOS.
4. Run Icaros installer and reinstall GRUB only!