I FINALLY got it to work, holy crap what a nightmare.
Turns out it did have nothing to do with Sata As far as I can tell, as we figured. The Bios DID have Sata mode disabled as I mentioned and explains why XP had no issue seeing the drive (though I thought SP2 had Sata drivers included....).
I don't know what was wrong, and it still bugs me, but my best guess is that I was trying to install to the 3rd or 4th partition each of the two times I tried prior, and somehow the lettering or something else was throwing it off. When it worked this last time, I installed it to the very first C partition.
The only other thing I did differently was slipstream SP3 into the install instead of only SP2. I did use the SP2 disc that I was using to do this, so nothing must have been wrong with the disc as I figured.
So either SP3 has something important for my hardware or otherwise that SP2 does not (doesn't seem that likely really), or installing on the first partition was the solution. When I try to enable Sata mode now it won't boot, so I need to install a driver first and go through a little process, then I should have my Sata running optimally hopefully.
Thanks for the help, I would sure still like to know what was wrong