In order to use a hard drive with an existing Windows XP system, you have to prepare the hard drive before Windows XP can use it.
The good news is that you can do this in Windows XP while WinXP is running, and even while you are doing something else.
To do this, you want the Disk Management part of
Start, Control Panel, Performance and Maintenance, Administrative Tools, Computer Management , Storage, Disk Management (Local)
This will display the multiple hard drives (Disk 0, Disk 1, etc) and the partitions on them.
Right-click on the SATA drive and create the partition size you want and then format it (NTFS format, unless you have a particular reason that you want FAT32).
Read more in Adding a SATA Hard Drive to Your System
