That model definitely shows as a 250GB see here
What version of XP? if you do not have SP3 you may not have support for large drives.
In Windows, click on Start->Run, enter "regedit".
Navigate to the HKEYLOCALMACHINE\SYSTEM\CurrentControlSet\Services\atapi\Parameters registry subkey.
From the Edit menu, select New, DWORD Value.
Enter the name EnableBigLba, then press Enter.
Double-click the new value, set it to 1, then click OK.
Close the registry editor.
Restart the machine for the change to take effect.