Quite the situation, lets start with something simple and go from there.
download , either the diskette creator or the iso version will work. The diskette version will create a bootable floppy or the iso will create a bootable cd. Create the disk and boot from it on your machine, it should detect your drives and give you the option to format them. I would try to format them then attempt the XP installation again. Im not 100% that the diskwizard will see the sata but it should. If it doesnt then we'll find something that does.