ITs a hidden system restore partition.. Fdisk Format Reinstall like every other good thing... If its done properly the way bill gates intended back in the early dos days you should have no problem... if all else fails grab a knoppix disk Gdisk the damn thing and walla no partitions whatsoever.. throw in xp and let it do its thing.
The thing that happens is when you leave the system restore partition on the drive and you install xp.. it trys using the system restore feature and freaks the fk out. its gotta go bye bye in order for xp to work properly.