I searched for the answer to this question because the auxiliary disk I was installing was not recognized by Windows XP Pro. Here is the answer.
Reboot and during boot press F2 at the first startup screen (where it says "F2=SETUP" at the top of the screen).
In setup, highlight the "Drives" category, then highlight each drive on the list.
Notice each one is "ON" except the last one (Disk 1). Turn that one "ON" and press ESC and Save-Exit.
The reboot will continue into Windows, but the drive still isn't ready yet.
Start > Run > diskmgmt.msc
Disk Management should offer you a Wizard. Go through the steps to format a primary partition on Drive 1. This can take an hour or two.
The volume is ready to use.
The sales rep wasn't sure whether the IDE (PATA) 2nd drive in my old Dell would be compatible with my new Optiplex tower. It was not -- the cables are completely different. When I discovered this, I didn't have time to wait for a drive to come from Dell, so I bought a Western Digital Caviar Blue hd at the local office supply store. Tech first-line support wouldn't tackle the drive-not-recognized problem because the drive did not come from Dell. If my old 2nd drive had been compatible, I still would have faced this same problem. The Optiplex is shipped with that SATA port disabled.
I was initially puzzled about the cable connection. The Drive 1 SATA data cable connection on the motherboard is not with the other two (Drive 0 and DVD). It is alone below where the power sxpply bundle connects to the motherboard. There is a power but not a data cable connection inside the case, I used the data cable that came with the drive. I had to cut a tab off the drive end before I could get the panel back on the desktop PC case.
I assume the drive is physically installed. If not or if you are not sure you've got it correct, the instructions are here. Your description of the location of the SATA port appears correct from the manual.
It seems you've also got System Setup correctly configured, and you know how to access disk management. So from your description, XP is not recognizing the drive in disk management. Is that correct?
Please post back and let me know if you need more help.