This error usually happens when installing windows XP on newer computers, Also very common problem on laptop computers particularly Acer laptops where the default SATA mode is AHCI.
1. Boot up your computer and press F2 or delete key.
2. Once you are able to get into the BIOS, go to Main (for acer computers) or look for SATA Mode and change it to IDE Mode (the default is AHCI Mode).
3. Press F10 and select save changes and exit.
4. Reboot and continue with the OS installation, the installer should be able to detect the drive now.