Hew,
Any relation to Hew Jorifice or Hew Janus, BTW?
Back to your question - the simplest thing for you to do is to install the Z drive as Master in old PC. Then simply boot this PC off the XP installation disk and delete existing partitions, then create new partitions, format and install XP afresh.
You can then easily mount the existing ME disk as a second, slave disk, copy any useful information over to "Z" (now C), then reformat the slave.
SD