I suggest you use DelPart.EXE from this site to make a diskette and use it to delete the Partition table from the Drive. When the partitions are deleted, the format and files go with them. Then start over with your W-XP CD and let it Partition and Format the drive before Windows setup
Run the diagnostics...this sounds like my symptoms, I had to buy a new hard drive and completely reinstall, but it works perfectly now.
Power on, hit F12, select diagnostics from the menu.