I was a repair tech for a compant that had a fleet of Dell GX280's
Windows XP from the factory, Dell XP reinstall disc the only thing that was necessary most times was to make sure you made a fresh pot of coffee
before you started.
so the whole XP doesn't recognize SATA drives is quite simply hogwash
They HAD to recognize SATA drives because there was NO IDE connector on the MotherBoard.
I also dealt with a bunch of Dell 1520 notebooks these also used SATA HDD's
Never had a problem doing an installation on them.
BTW if you don't have a Dell reinstallation disc get one, the best one to use is the Teal colored XP PRo SP3 disc.
These can typically be found on ebay for ~$15
Installing XP with a genuine Dell disc you will NEVER need to "Activate" your installation, without a genuine dell disc you are on your own...
SOMETIMES a particular boar was a bit twitchy about recognizing an UNFORMATTED drive, but generally I'd format them as a separate operation before I ever got near a system for a fresh installation of XP.