Thanks for clarifications!
As posted above, check the cables. Always the first thing. You'd be amazed how many problems can be resolved with simple things before getting so technical.
What do I mean? Well, hard disks have 2 or 3 cables. The power cable (with 4 pins, usually - depends on model), the main connector cable, and sometimes a little flimsy thing (you might find one in the back of the CD-ROM drive). Usuaully, you only need the power cable and the main attachment cable.
Soemtimes, there is a little black peg in the back of the disk. This can be placed in different positions which means the disk will be read as a particualr kind of disk. Have a look. If so, the book (or even on a little ticket nearby) will tell you which position refers to MASTER (not slave). Check that out.
Second, go to the BIOS when the computer turns on WITHOUT the disc in the drive. You normally press delete or F12 (or F8). Find the option for Boot Order. You might also have the option of choosing this direction without going to the BIOS. The keyboard shortcut will be displayed at the very beginning. Make sure the CD-ROM is set for that, and not the hard disk - of course, have the hard disk connected.
Reset with the disc in, and allow it to boot from the disc automatically. The disk should start to load various drivers into the BIOS. Hopefully, you'll arrive at the screen to install XP. Select the appropriate Partition (or create one), and go for it. If it asks you to Format, select the full format which it says takes a little longer. If that works, you should be set...
Keep me updated! We'll take this step by step, getting more complicated each time until we conclude the HD is f*&^ed
