To clarify:
EricB, I did install the raid drivers, as I said, that issue was cleared up.
Warez Monster, Apparently the windows upgrade CD has a full installation of Windows XP on it. The reason behind making me put in a previous "full" version of windows is to verify that I am actually "Upgrading". After the program verifies that I have an older windows OS disc, it asks me to replace the upgrade CD and it continues with installation.
Thanks for the help, I am about to reformat again... and install 2000 Pro then upgrade, instead of just using the upgrade cd to install... I'll be back in about... well.. an hour or two.