Hey,
^^ Same as above; if you are attempting to use the old hard-drive that can be an issue. Even sometimes when attempting a "full/fresh" reinstall, the system can restart / bluescreen when tryiong to boot the XP CD and load it due to old driver conflicts, and also having an older version of the Service Pack on the CD, than is currently installed on the drive. I would recommend using Maxtor Powermax, or your hard-drive manufacturers given diagnostics tool to do a "quick" low-level format on the hard-drive first (NOTE: YOU WILL LOSE ALL OF YOUR DATA!!!). Once this is completed; if you still have issues post back (also post back if you succeed). Depending on the motherboard chipset; the SATA controller may require an "F6" floppy driver to be loaded before the hard-drive is detected, but it does not sound like this is the case anyways because the detected hard-drive being installed with the OS is causing the reboot / blue screen.
Hope this helps.
dg6464
Note: A good all-in-one free CD to download that has most diagnostic tools you will need, and all hard-drive manufacturers diagnostic/formatting tools included (unfortunately Maxtor powermax (my favourite) is gone since the Seagate acquisition...) is the UBCD. Burn it with nero / your burning program, and boot from it. It also has non-manufacturer diagnostic tools that do an even better job of formatting (not required in this case) like Active@Killdisk, or Derek's Boot'nNuke.