I've heard bad things about Wubi, I wouldn't use it unless you're looking forward to a broke as hell install of Ubuntu.
I'm using WUBI-Ubuntu as the main OS (school supplied Windows 7, but the IT guy okayed dual-booting) on my school computer with no problems.
It my have been what crashed my pc, but that was a year later.
Seriously doubt it, the only impact WUBI should have on the Windows boot is that it adds it's GRUB to the BCD (configuration file for the Vista+ boot loader), which you can rebuild using BootICE (included on Hiren's Boot CD, I recently had to do this after a failed conversion of my Windows install to UEFI).