Well first thing is check the bios to make sure your hd ahs been detected if not then you need to check the settings and the cables to make sure its installed correctly then you can formatt and partion using the western digital drive tools if you don't have the disk you can d/l it here
http://support.wdc.com/download/index.asp then someone else will have to help you from there as I know next to nothing about installing xp
edit: i'm assuming since the hd is the only thing you asked about that everything else is working fine???