|The hard drive must show in in the computer's bios Setup.|
Assuming the hard drive shows up fine in the bios.........
If the computer's bios Setup has the SATA drive controllers in a SATA mode, the initial files loaded from the XP CD when you boot from it CANNOT recoginze SATA drives by default because there are no SATA drive controller drivers on the CD.
The easiest way to get around that is to change a setting in the bios Setup.
If the bios Setup has the SATA drive controllers in an IDE compatible mode of some sort, the XP CD WILL detect SATA drives by default, as IDE compatible drives.
We probably can't tell you where that setting is and what it's wording is, because we usually cannot find that info for a brand name system bios version on the web, but whatever it is it's presently set to SATA (or AHCI), it's changeable, and at least one other choice is an IDE compatible mode of some sort - e..g. IDE, ATA, PATA, Compatible, etc. Save bios settings.
Later on after Setup has finished and you have loaded the drivers for your model including the SATA drive controller drivers, you can change the setting in the bios so the SATA drive controllers are in a SATA mode.
OR, IF AND ONLY IF the laptop has a legacy built in floppy drive, you can load the SATA drive controller drivers from a floppy disk by pressing F6 near the beginning of loading files from the XP CD.
(The 2000 and XP CD at that early stage cannot recognize the driver files being on a USB drive, another hard drive, another hard drive partition, or another CD, and cannot recognize most models of USB floppy drives unless they were available when XP was first released circa 2001, and very few if any USB optical drive models.)
OR, you can make yourself a "slipstreamed" CD-R that has the SATA drive controller drivers you need integrated into the contents of the XP CD. If you do that, if your Windows CD does not have SP3 updates integrated into it, you might as well integrate the SP3 updates into the CD contents while you're at it. You use that CD rather than your original XP CD to install Windows, along with your original Product Key.
Instructions for making a "slipstreamed" XP CD are plentiful on the web.