Not too sure whether this suggestion is going to work, but it is going to mean making another disc.
There are several articles around detailing the preparation of a slipstreamed version of XP without using nlite. One of which is at the eldergeek
What i will suggest is copy the xp disc in its entirety to a folder on your hard drive. I don't know whether there are any hidden files and folders, but it might be worth setting explorer to display hidden folders and files, system files etc. include the drivers for your SATA drive in a folder. Use Isobuster to extract the boot image (as per elder geek instructions), and re-burn the disc, again using these instructions. What you should hopefully end up with is an exact copy of the dell xp disk with the dell validating routine, plus your sata drivers to allow you to install.
As an aside, i have just found some other information that might be useful. There are articles that state that slipstreaming XP on a vista machine does not work properly and will give you problems with the cd key not being recognised.
1) to prepare a not slipstreamed version of XP with instructions above
2) Use Nlite on an XP machine or server 2003 machine and repeat what you have already tried.
I hope this makes sense