It's internal, I built it inside. It is connected to the PC via two cables - the power supply cable, and a bright pink SATA cable (this goes to the motherboard). I see it in the system tray alright - the problem is, the hard drive only appears under the "Safe disconnect hard drive", so it seems Windows XP somehow can "feel" it...yet, I can't use it, will not appear when I open "My computer".
I was thinking about it needs to be re-formatted or such, but if I can't access it, how could I format it? It also does not have any partition (it should be D:\), and there is no such option as "Found new hardware" on the system tray - I see only "Safe disconnect" as an option.