ok, not sure if you ever figured this out or not, but since i read 3/4 of the posts and then got tired of reading, i'll just post it here.
first, if his BIOS hadn't detected the HD, it wouldn't have shown up at all in the hardware device list, so that's not your problem.
if you had the master/slave set wrong, neither drive on the chain would have shown up, so that's not your problem.
odds are the drive just wasn't formatted.
right click on the "My Computer" icon. go to "manage"
from there there's a drive utility that will allow you to format the drive, although i'm not sure of it exact name off hand, i don't have XP in front of me at home. that would fix it.