Time to get to know one of your local computer nerds? It sounds like a simple configuration problem, but we can't see what you are doing wrong. If someone could sit down in front of your machine they could figure it out in 5 minutes. You gotta know somebody who would help.
Leave the old IDE drive out of the computer and try this:
Set the BIOS to boot from cd-rom
Boot from the XP disk
You pressed F6 when prompted from the status line "Press F6 if you need to install a third party SCSI or RAID driver"? You have 6 seconds to press the F6 key.
You can find the rest of the directions
here.