Sata Drive not recognised by BIOS
SATA 2 (SATA 300) is not backwards compatible with a SATA (SATA 150) controller. In order to use a SATA 2 drive on a SATA (SATA 1?) controller, the hard drive must have a jumper position to restrict it to using SATA (SATA 150), and a jumper must be installed. Some drives have the jumper position available (e.g. some recent Samsung), some don't (e.g. some recent Maxtor).
This information can also probably be easily found on your hard drive manufacturer's web site.
If your drive does not have the jumper position available, you must return it and get a SATA 2 one that does, or a SATA drive.
Installing XP on SATA drive
Once you have the drive(s) connected you are ready to start installing XP.
Master and Slave
Remember since it's serial you can only have one device per SATA port/cable so SATA drives don't have jumpers. On the Motherboard SATA1 Port is for the primary device, SATA2 port is for the secondary device etc.
SATA controller driver
Your Motherboard or SATA controller card requires a driver to work properly. If you did not get a Floppy Disk with the SATA driver included with your Motherboard you will have to make one. The SATA drivers can be located on the installation CD that came with your Motherboard or preferably, download the latest SATA controller drivers from the manufacturers site. Once you have located the drivers copy them to a formatted floppy disk. Make sure they are in the root directory i.e. not contained within any folders.
When you turn on the PC hit the Delete key when prompted and you will enter the BIOS (Basic Input Output System). Here you set the first boot device to be the CDROM drive, the option is usually found under the Advanced Options section but this depends on your BIOS and you may have to look around for it. Once you have done this save and exit.
Installing the SATA controller driver
Once you have set the PC to boot from the CD make sure the XP CD is in the CD drive and start the installation as per usual. Within the first minute or so of the installation Windows will prompt you to press F6 to install RAID or SCSI drivers, do this. Windows will continue to install then ask you to locate the driver. now with the floppy disk created earlier in drive A: select the driver and hit Enter.
With the SATA drivers installed you can now continue the Windows installation as usual.
BIOS settings revisited
Once Windows has finished installing you will need to make sure the PC is set to boot from the SATA drive. To do this make the first boot device SATA if the option is available. If not you have two options: HD0 - If there are no IDE HDs present, or SCSI if you do plan on running an IDE HD as a secondary device.