If you really have no intention of trying to recover everything on the drive and proceeding with a fresh install if Win XP, there may be some items to adjust.
1. Win XP does not know how to handle SATA devices without help. If your drive is a SATA unit, Win 7 could certainly handle that as a native SATA or AHCI device, but Win XP cannot. One way to deal with this BEFORE you try to install XP is to enter your BIOS Setup screens and configure the SATA port for the HDD to use the IDE (or PATA) Emulation mode. This option makes the drive appear to be an older-type PATA unit that Win XP fully understands and can use, but it eliminates a few features of the newer SATA designs. If you set it this way, Save and Exit the setup system, then boot from your XP Install disk in the optical drive and you should have access to the HDD.
2. If you want to continue using the AHCI mode for a SATA drive you can. To do that you will need the proper driver for an AHCI device under Win XP on a floppy disk attached to your machine. There is a place early in the Install routine where it asks if you want to add some extra drivers; if you do, you must press the F6 key and it will allow you to do that. BUT it only knows how to load them from a floppy disk. If you follow this procedure, Windows installs that driver as a part of its basic capabilities from now on, and it can use the AHCI mode HDD unit for Installation, booting and running.
3. In doing the XP Install from its CD, it might be good as a first step to use the Install routine's option to Delete any Partition already on the HDD. I guarantee the HDD had a Partition. Moreover, if you truly just did a Delete operation, that cleared out almost all the files on it, but it did NOT remove that Partition. So, when Win XP tries to install, it will find there is no empty space on the drive to create a new Partition. Rather than trying to Install to an old Partition that may still contain junk, you'd be better to Delete it first and start as if the drive were totally empty.