There is only one drive plugged in at the moment so there's no chance of XP being installed on another drive.
One of the times I reformatted it, it ended up coming up with an error about 'hal.dll' missing. Research revealed that it was a problem with the BOOT.INI? This happened before Windows would even begin to load.
It is becoming quite frustrating. I have no idea what to do now.
BTW - The OS is XP Professional SP2
System specs are as follows (If they help?)
Intel C2D E6700