Problems With Seagate 7200.11 on New Build

I've been having problems with getting win xp installed on an OEM Seagate 7200.11 320gb sata HD. This is a new build and everything checks out in BIOS. After setting HD to native IDE in BIOS, and trying to install win xp, I got the error message at the partioning screen that setup cannot access the drive.

I ran SeaTools today and I am not sure of the results.

When starting the computer with seatools in the disc drive, I get the error message: Error reading partition table.. Then the SeaTools program comes up and shows me it has detected the drive.

I ran the short test at first and got an error message: A SMART trip was detected prior to the test starting. Do you want to continue.

I hit continue and test immediately concludes and reports Failed.

The second thing I tried the Long test and got the same SMART trip message. I hit continue and immediately a box came up saying errors were detected. I clicked fix and it just sat at the screen that shows Errors detected during Long Test Screen.

Does this mean the HD is no good? Everything is connected correctly and the HD shows up in BIOS but problems with seatools and windows install make me lean towards RMA'ing it.

System

Gigabyte GA-EP35-DSBL Mobo

Intel E8400 3.0ghz processor

Corsair DDR2 800 2gb ram

Seagate 7200.11 320gb SATA

Sony DVD SATA

Corsair 550vx psu

xfx 8800gts 512mb