I tried it again with FAT32 EFI partition.
(continue from previous)
1) Remove the Windows 7 partition using Disk Utility
2) Resize the OSX partition to cover all spaces available
3) Install
boot0fdisk440 -u -f /usr/standalone/i386/boot0 -y /dev/disk0
4) Set EFI partition as active partition
(Reboot - found able to boot into OSX)
5) Change the EFI partition filesystem from HFS to FAT32 (when I said "change", I meant erase/format):-
newfs_msdos -F 32 -v EFI /dev/rdisk0s1
6) Restore the EFI contents
7) Reinstall disk loader & whatnot:-
fdisk440 -u -f /usr/standalone/i386/boot0hfs -y /dev/disk0
dd if=/dev/rdisk0s1 count=1 bs=512 of=/tmp/origbs
cp /usr/standalone/i386/boot1f32 /tmp/newbs
dd if=/tmp/origbs of=/tmp/newbs skip=3 seek=3 bs=1 count=87 conv=notrunc
dd of=/dev/rdisk0s1 count=1 bs=512 if=/tmp/newbs
(Reboot - found able to boot into OSX)

Split the partition to two. 2nd partition for Windows 7.
9) Reinstall Windows 7.
10) Boot into OSX using external boot disk (USB)
11) Reinstall disk loader & whatnot:-
fdisk440 -u -f /usr/standalone/i386/boot0hfs -y /dev/disk0
dd if=/dev/rdisk0s1 count=1 bs=512 of=/tmp/origbs
cp /usr/standalone/i386/boot1f32 /tmp/newbs
dd if=/tmp/origbs of=/tmp/newbs skip=3 seek=3 bs=1 count=87 conv=notrunc
dd of=/dev/rdisk0s1 count=1 bs=512 if=/tmp/newbs
Result:-
Finally, able to boot into Windows 7 & OSX with
boot0hfs.
I don't know why it doesn't work when I tried earlier.
Wish list:-
Please, please, please add support for EFI partition with HFS filesystem. I don't like FAT32 since it produced a lot of "dot" (.) files.