|"Next I formatted it using format C:"|
command should have been format c: /s or you get no boot files.
All of this is completely unnessisary.
You do not need to have a formatted disk. It can be raw with no partitions. This install should be just like you booted from dvd with the OS cd. Aftrer the copy files phase you are presented with where to install the OS.
"XP setup cribs saying it didn't find any disks of the required size"
That doesn't sound right. Wasn't the message no disk found? this would indicate you didn't slipstream the drive controller driver into the install.
" Is my hard booting of the laptop after creating the partition causing the issue?
no its not. its required after you fdisk and before you can format.
You shouldn't need to format or fdisk. This is where the problem is.
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