First of all, look closely at the jumpers on your SATA HDD. For almost all of them you should NOT change any jumper settings. There are NO jumper settings for things like Master and Slave on SATA units. The jumpers and pins that do exist on a SATA HDD are for different purposes entirely. ONE jumper may be used to force SATA 150 Gb/s speed, as we have discussed. That is the ONE jumper you may want to add or remove. I know that on WD HDD's there is another jumper and pin pair that, if misused, can make the HDD completely useless - is appears to be dead! But it is not, and if that jumper is reset to the proper factory default setting the drive will be fine. SO - go to the WDC website and look up your particular HDD unit. Find the proper factory default jumper settings - it MAY be one jumper in place to force SATA 150 Gb/s speed, and NO other jumpers. Whatever it is, set your jumpers that way.
Now, the sequence of what you did is not entirely clear BUT I did notice something important. I THINK that you installed Win 7 at a time when there were at least two HDD units mounted in the machine. Now as part of its normal Install process, Win 7 will try to create a backup basic installation in a completely separate Partition. The idea is that, if your system has major problems later from corruption, it can use the hidden safety Partition to boot from and restore the corrupted main Partition. One aspect of this is that, if two HDD's are available at Installation time, the safety Partition will be placed on the second HDD, and then the main installation will go on the first HDD. Several people have reported here that, after this was done, they removed or changed that second HDD and suddenly their Win 7 will not boot! Apparently in the normal boot process, Win 7 wants to be very sure that the safety backup is available in good condition, and it won't complete the boot if it is missing.
Now, you say there was some message about creating a small 100 MB Partition in the Win 7 Install process and you agreed to that - perfectly normal. That sounds like the process to create the safety Partition. Now, after several other changes, you have a system that gets as far as successfully detecting a 160 GB WDC unit as the Third Master drive and then fails after that. Maybe this is when Win 7 fails to find the safety Partition somewhere. Maybe in the process of the other changes you deleted or replaced that 100 MB secret Partition, OR you removed a drive that was originally present when Win 7 was Installed.
If that is what has happened to you, MAYBE you can find and re-install a missing drive that contains the 100 MB safety Partition. Otherwise you may need to re-Install Win 7. If you do that, I recommend you do it in a configuration with ONLY that one HDD in the machine so the safety Partition will be placed on the same HDD unit and always available.
If you want to have a "dual-boot" machine in which Windows itself sets up a method and a menu for choosing your Windows version at each boot-up, there is a particular sequence you must follow. FIRST you install the OLDER Windows - in this case, XP - and it's often wise to do that with only one HDD in the machine. Once that is running you install your second HDD unit. THEN you Install the more recent Windows - in this case Win 7 - and it will detect the existence of a previous Windows and ask if you want a Dual Boot feature created. You say yes and, along the way, make sure the Win 7 Install is being done on the HDD where you want it - probably NOT the one that already has XP, but it's your choice. It will set up the Dual Boot menu system for you as part of the Win 7 Install.
NOTE that you cannot do this in a backward sequence. You cannot install XP on a machine that already has Win 7 installed on a HDD and expect it to figure it out and create a Dual Boot system.
There is an alternative way IF you are willing to manually change stuff, but it is not so easy and neat. Basically you mount one HDD only in the machine and install one version of Windows on it. Then you remove that HDD and install another one by itself again and install the other version of Windows on it. Then you re-install the first HDD. Now no matter which Windows you are running, both HDD's are accessible to Windows. The trick is, which one is used to boot?
YOU have to control that. You go into BIOS Setup and set the Boot Priority Sequence to use one particular HDD as a boot device and NOT the other, Save and Exit and it will boot from that HDD and its installed version of Windows. That HDD will be the C: drive and all your other devices will have letter names. It will stay this way for all subsequent boots until you change it. NOTE that this involves NO Dual Boot option or menus - the Windows you're running does not know there is another Windows installed somewhere, even though you will see all the files on the drive that contains the "other" Windows.
If you want to boot from the other Windows you must enter BIOS Setup and change which drive it boots from, Save and Exit. Now it will boot from that other drive with its other version of Windows. And that drive will become the C: drive, with all other devices given letter names that MAY be quite different from what you had before! Again, it will stay that way until you change the Boot Priority Sequence in BIOS Setup.
Not nearly so neat as the automatic Dual Boot system that a LATER version of Windows can create for you when it is installed.