NO, there aren't no "master and slave" options (accourding to my hard-disk's packaging).... The only problem is that you HAVE to use the program that came with the drive for windows to install onto it, otherwise it says that the partition isn't compatiable and tells you to "delete" it, so you do and the same message comes up, and it goes like this in an endless loop....
My drive is 160gb and it was only £100 brand new out of the box!!!!!
SATA is a completely different connection, and uses a cable able a centimeter wide. My motherboard has 4 SATA ports which support only a single drive, you cannot use masters and slaves. However, don't forget that you'll need at least 1 IDE/ATA port for optical drives.
Not sure about the problems with installing onto a SATA drive, though a version of XP with SP2 will probably install with no problems. XP came pre-installed on my system, though I had problems with several distributions of Linux that I wanted to try because they wouldn't recognise the SATA drive.
If it is the case that you need the manufactures software to install XP then make sure you buy a Retail Boxed version and not an OEM one, since this is unlikely to come with the software you need - i think.