This problem, and the suggestions offered, depend on the OS (Windows) you are tying to install. IF you installing Win XP in any form, or some version prior to that, it cannot deal with a SATA device (more properly, an AHCI device) until a driver for that is loaded. Since you appear to be trying to use this unit as your boot device on which the OS is to be installed, that's a dilemma with two possible solutions.
1. Read up and follow the instructions for how to install an AHCI device driver early in the Windows Install process by pushing the F6 key and loading the driver in from a FLOPPY disk. Obviously, that means you would need to have a floppy drive at least temporarily installed on the computer, and a diskette with the driver on it. Read your laptop's instruction manual for details of this if you are installing Win XP.
2. If you don't have a way to use a floppy drive, your BIOS probably has a work-around. Go into it and look for the area where you configure the SATA ports and Enable them. Look nearby for a line like SATA Port Mode, with options like "IDE (or PATA) Emulation", Native SATA", "AHCI" or "RAID". Set this to "IDE (or PATA) Emulation), then Save and Exit. In this mode, the BIOS makes the SATA drive appear to Win XP to be an older IDE drive that it does understand fully, and it will work.
HOWEVER, if you are NOT installing XP - that is, if you are trying to install Vista or Win 7 - this stuff is NOT your problem. Those newer OS's DO know how to use an AHCI device like any SATA drive, so for them the BIOS' SATA Port Mode should be set to AHCI. If this is your situation and it still cannot detect the drive during Install even though the BIOS does "see it", there's something really odd going on.