Thats probably because Vistas on there so its ignoring XP, my guess is youll have to use partitioning software to create a partition on the HD, set boot order to CD, and boot the XP setup disk and install on created partition.
CAUTION: TAKE CARE WHEN PARTITIONING AS IT'S RISKY, if you need help with partitioning lets us know.
I have shrink the orginal partion to create a secondary partion, formatted it using disk manager in vista as fat32 but still the XP installation still did not see the hard drive at all. Booting to CD or DVD is no problem.
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