First of all, don't create duplicate threads. You could have asked this on the first thread. So, do that next time.
Formatting your drive will remove all linux files.
I'd think you could have booted WinXP with Red Hat even if Red Hat doesn't support SATA, though I'm just quessing.
The kernel panic thing is caused by, as it says, the kernel isn't able to find the (/) partition.
This can be caused by wrong configuration in "/etc/fstab" file. In there if you have specified that root partition is something like "/dev/sda2" and kernel doesn't support sata, it will use "/dev/hda2" instead. Now, the kernel uses "hda" and the file says "sda" so it will give the above error message.
In your case it is probably caused by your chipset. When the installer starts it will usually give some boot options. Check those out if they would aid you. You could try shutting ACPI off ( acpi=off or something). I haven't used Fedora that much so I don't know what kind of options it gives or even does them solve your issue but I'd say the are a good starting point.