It allows the motherboard to treat SATA HDD's like IDE HDD's for older OS's (such as XP).
The USB stick is likely causing a conflict as they can be used to Flash the BIOS, or as a boot device.
You can mix or match IDE and SATA HDD's any way that you like. With that said, it also depends on the motherboard. Some motherboards have SATA controllers that support RAID only. Others allow the drives to be used in "IDE" mode as single drives.
As you don't want to use RAID, ensure "RAID" is disabled in the BIOS.