That's a distinctive size - typical of missing "48-bit LBA Support". Check the Help ... About screen of Win XP. If is shows NO Service Packs installed, that is the problem.
The original LBA system used 28 bits in the address for a disk location, which limited disk size to 137 billion bytes or, as Windows calls it, 128 GB. It was updated around 2000 and all SATA hardware has support for the new version called "48-bit LBA". But the OS also needs to support, and the original version of Win XP did NOT. It was added in Service Pack 1 and maintained in all Windows since then.
If you confirm that you have the original Win XP installed, you have three choices.
1. Live with it. Update your Win XP now to SP3. This will NOT allow you to increase the size of your C: drive Partition. However, it will allow you to create additional Partitions (using Windows Disk Management) in the remaining Unallocated Space on your HDD unit that you can use for data.
2. Buy a newer Win XP Install Disk that has one of the Service Packs included. Do a new Install (delete the old Partition as the first step so the entire disk is empty). When done, update to SP3 if you don't have it in that disk.
3. Read up on the net how to "roll your own". It is a perfectly legal process called Slipstreaming. You download some tools for the job and a whole set of files from Microsoft. They allow you to start with your current licensed original-version XP Install disk and build up on your C: drive an image of a new Windows Install Disk with SP3 and all the latest updates included. Then you burn your own new Install Disk on your optical drive. Then you use it to do a new install, deleting the old Partition. This way you have a legal new Windows Install Disk including SP3 for future use after you have done the installation.
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