Make sure you truly check the jumper status also for single and dual drives besides any master/slave setup. In other words, there maybe a 2nd jumper involved. The sticker/decal on the HD should explain how it is mounted with dual drives -OR-check the support website for that info. You also didn't provide any great details on the HDs themselves. If the new one is greater than 127gb or your XP is isn't at SP2 level or better, than needs to be corrected. Further, your bios may also need attention, so don't discount that, it maybe needed for larger HDs on top of the above explained.
I have installed a second Hard Drive into an old Dell computer. Bios recognizes it but Windows XP does not. All of the recommended jumper settings do not work. Master HD is a Maxtor (Seagate) and slave HD is a Western Digital. I don't want to reformat the WD slave as it has data on it I want to save. Any ideas?