Make sure you have XP SP3 installer - if not find one online for your version (retail/OEM).
For separate HD's unplug all but target HD, wipe the HD using Diskpart Clean Command
then try install. If it fails again you'll likely need the SATA drivers
added: SATA Drivers - Load in Windows XP Setup on Dual Boot SATA Drivers - Slipstream into Windows XP CD
I would try the AHCI drivers first if you have your BIOS set to that since changing back to IDE may cause Windows 7 to fail to boot.
After install, plug back in other HD's, set preferred OS HD first to boot in BIOS, then boot other OS HD using one-time BIOS Boot Menu key at boot. This keeps the HD's independent to come and go as you please and minimizes interference from XP. However if this is not convenient for you after trying it for awhile, you can install EasyBCD 2.02 to Windows 7 to Add XP to a windows-managed Dual Boot menu.