|"I have checked this on the web and it points to this being a SATA issue"|
You're correct, it IS an SATA issue. XP does NOT natively support SATA so you have to load the drivers at the beginning of the installation by pressing F6 & then inserting a floppy containing the necessary driver. If your system doesn't have a floppy drive, you'll have to create a new XP disc with the SATA driver slipstreamed into it. Use a program called nLite to create the new disc.
You may also have trouble locating XP compatible drivers for the hardware...especially sound & network. Hopefully you made a note of exactly what hardware you have BEFORE you formated?