as you use ME forget the dynamic disk thought.
to flaten the hd is not nice but a low level format will clear the drive out, but beware if the util is not supplied with the hd do not do it.
use fdisk and delete the hd, If you have the full XP then do not create anything on the drive , XP should do its thing,
On more thought did you install from a bootable cd ?
if you used your ME boot disk it will have made a ram disk and this may have fooled XP, the me boot disk will then put the cd drive letter to early.
the bootable XP and or w2k setts its drive leter to A so no problems can happen