Been there, done that!
What is your motherboard? Seeing that you re-installed Windows XP, I think this is the issue.
Motherboards made before 01/01/2003(?) do not support the 48-bit LBA, to reconize hard drives larger than the 137GB limit:
http://www.48bitlba.com/overview.htm
Some manufacters have a BIOS update, that would then support larger hard drives.
You did not partition is as such, right? Just lost 123GB?
You have some choices:
1. Leave it as it is. Loose all the extra space.
2. Some hard drive manufactures have a "patch"
(i.e. Western Digital Smart Drive) to overcome this limit. I used this on my old 486DX machine in the 90's that would only support up to 2.1GB, and I had a 2.5GB drive. It just partioned the drive into 2150MB and 400MB.
(This is a software fix, for a hardware problem.)
3. Get a new motherboard, to support large hard drives, and your current CPU.
($$)
4. Get an add-on drive controller card to support larger hard drives. I think these can overcome the motherboard onboard controller limit.
(Research it, via online retailers.)
4. My suggestion: Get a 120GB hard drive, for now.
($$).
BUT, having just
"bing-ed" the 48-bit LBA, I found this:
http://support.microsoft.com/kb/303013
Did you install Windows XP SP1 or higher? That is what the site is getting too.
GO there first!