Boot from your XP CD, it will bring you to a page and ask you what you want to do, one of the options is to delete a partition, or add a new one. Right now you only have one, so choose the option to delete a partition and delete it. Then choose to create a new one, it will give you the option to choose the size (I think it's in MB not GB), so create a new partition and make it 125,000MB. Then go through that process again and create a new partition the same size, 125,000MB.
Then it will ask you to format the new partitions, choose NTFS and format both.
Then you have to install XP on one of the partitions you just created, choose one (doesn't matter which) and go ahead with the install. That will give you one drive that's 125GB with your OS on it (C) and another logical drive (probably D or E) with 125GB on it.
It's pretty simple, just boot from your xp cd, read the options and do the above.
Basically, Windows XP originally did not support drives larger than 127GB, they released service pack 2 which resolves the issue. But many people have posted here that have this same problem even though they downloaded SP2. Slipstreaming (adding) SP2 to the XP cd directly and then reinstalling XP should fix the problem also.
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