Debian and Ubuntu can be installed in the same hard disk at different partitions and it worked for me. The default boot loader in Debian and Ubuntu is Grub. Lilo is used when Grub encounters problems while installing. I had come across such situation only once and that time, the hard disk has got some problems and bad sectors. So, check whether your Hard disk is all right.
If its ok, then it might be the conflict between Grub and Lilo. Try reinstalling Grub using a bootable grub floppy. |