because it is showing at the beginning that there is a problem with the IDE controller. Since it is being recognized by windows and in the bios (would be if windows can see it) then the problem is with in the communication. A bad or dirty lens wont give the prompt to install the IDE channel driver. So, that means either the IDE pin id is not recognized properly (not all paths on that ribbon cable are for data, some is for media to MBD id communication and pnp info). Since its having problems with communication (physical or software) and the IDE channel gives us a hint then u can determine its either improperly seated IDE cable, the chipset driver is corrupted/not isntalled and many newer MBD's will not function due to more advanced chipset configuration, you REALLY need its special drivers for proper function, COULD be the bios, or its the setup. It maybe set for PIO but should be UDMA... usually when that happens, though, itll read the disks but SLOW and sometimes with errors.
another good test... try and boot off of the XP cd, or get a boot disk with cd support and browse the cd in dos... if it works there, its something with software.
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