Don't format!
You say it already was in use before and contains substantial information. Then it was formatted, etc before. IF we assume it has not been damaged (fair assumption) the problem is elsewhere.
You say the BIOS sees the disk and one software tool can see it, but Windows can't so Windows is the problem. I am not yet familiar with XP, but I believe there are tools within Disk Management used to tell Windows to look for a hard disk and use it. By the way, are you sure the BIOS is set correctly about its size, etc - usually this is done automatically and there is no problem. And in Windows, make sure the OS knows which file system to expect on this drive - I am presuming NTFS for a big drive, but check it.
Oh, and if this is a PATA drive, is it (and your 80 GB) set to Master and Slave so they can share an IDE channel (or, did you go Cable Select?) Or, if they used to share a channel and you split them up, did you adjust for that? Of course, if these are SATA none of this applies.