|"I deleted all the partitions, using a Windows XP setup disc,..."|
The XP CD must have SP1 or later updates integrated into it in order for it to be able to recognize hard drives / hard drive partitions larger than 137gb manufacturer's size = 128gb binary size in the bios and in the operating system.
The enclosure's circuits must recognize the full size of the hard drive.
You can usually see the size the external hard drive circuits detect in the mboard's bios.
If the enclosure's circuits recognize the full size of the drive, if the XP CD had no SP updates at all, it can't make a partition larger than 128gb.
In that case you can go to Disk Management in Windows, delete the existing partition, and make a new one, or more than one, that fill the available space on the hard drive.