Help with hard drvie

I have been asked to have a look at a pc bought for my neice at xmas. When the pc is first turned on the opening screen shows the primary master as the hard drive but when i run windows xp setup i press return to begin installation it say there is no hard drive. I took out the hard drive and put it in my pc and i was able to access it no problem i even formatted and re-labelled it hoping this would help the other computer recognise it but with no avail i went to the manufacturers website snd download the installation disk and run the setup up programme it again recognized the hard drive but would not run the setup programme saying there is no hard drive. I reset bios using jumper on MB no help.

Spec
KM266 pro MB
VT8235 chipset
Maxtor fireball 3 HD

The annoying thing is i have seen this pc working albeit a while ago before it was put away by the previous owner due to getting a new system. I have spoken to the previous owner the only thing he has changed was he added a new CD ROM which i have diconnected.