Hi,

With the power off, remove the top.

Take anti static precautions by grounding yourself once you take the top off

Set the jumper on the rear of the "new" drive to Cable Select. 

Then add this drive as a slave device on the middle connector of either IDE ribbon cable in your machine.

With the product activation Win XP has the hard disk you are trying to add is looking for the hardware configuration from the computer the drive was removed from. As it does not find it. It has problems.

Once you have copied the files you want to CD. You can simply reformat the drive from My Computer.

hth

Ceri