I have not switched to lilo yet but it might happen.
Grub will only boot a different O.S than the one that installed it if it is chainloaded. If you manually add a O.S entry in the menu.lst file all that happens is the Title ends up in the boot screen text. Error 17 is displayed after trying to boot.
Grub will not boot ANY O.S manually using the grub shell.
Well.. that's not true. You only need to chainload when you need to call up a different boot loader other than grub (e.g. a windows boot loader). So.. grub CAN boot OS's from the grub shell... and if needed it can transfer control to a foreign boot loader as needed.
I think maybe we need to know a LOT more about your setup before we can know what exactly is wrong.