If your system can boot from a CD, download one of the "Rescue" Live Cds and delete all partitions on the drive. (E.g., System Rescue CD
which will work for XP and Linux could be a good choice.) Once the partition table is empty, XP should have no problem with it, but, if it does, you can use the tools on the rescue CD to create an NTFS partition on the drive.
The rescue CD will, of course, be a handy tool to have around when you new Window$ system "barfs" on your work.