SATA drives are not recognized by Win98SE unless the BIOS is set to compatibility (PATA) mode for those drives, however that may yield slow performance.
As for the 80GB drive install, when the Hardware Wizard pops up, just dismiss the dialog(s) (hit Cancel) until Windows finishes the boot sequence, then copy the driver kit(s) to the HDD, unzip where appropriate and install them manually or go to
Control Panel > System, select the problematic device(s) and choose
Update Driver.
To explain the above: Windows detects the new hardware early in the boot stage and pops up the Hardware Wizard before loading the CD-ROM driver, that is why you cannot "see" the optical drive while trying to install drivers from a CD/DVD.
[EDIT]
If the machine won't boot with the XP CD while you're sure the BIOS is set to boot from CD-ROM first, this can only mean one of the 2 things: either the CD is damaged or is not bootable. Try another bootable CD, verified on another machine, for confirmation.
Thanks
submix8c; still missed the above bit first, though.
This post has been edited by Drugwash: 31 March 2009 - 08:56 AM