Three possibilities:

1. It's a SATA drive and the setup of your version of Windows XP doesn't support SATA-drives without you offering it the SATA-driver on a diskette. Press F6 when asked for RAID and put that diskette in that came with the laptop.

2. I tried to lookup the specs. I couldn't find if it was SATA or IDE. But I found one at amazon (out of stock) that had a 80GB hard disk. So it could well be that it came with one of earlier versions of XP that don't support disks > 127 GB. In that case, you can expect troubles if your new hard disk is greater.

3. The motherboard is failing.

If it's #1 (most likely, if it's indeed the old disk that failed), the HP supplied recovery media should work, even when a stock XP disk doesn't.

If it's #2, try a disk that has the same size. Using the HP recovery media won't harm at all.

If it's #3 it's time for a new laptop.

You didn't provide all details, that's why not everything I mentioned applies to you.