The error is likely due to the XP CD needs SATA controller inserted at the F6 prompt during the initial driver loading phase. But you need a floppy drive to do this or else you have to slipstream the driver in using this process:
SATA Drivers - Slipstream into Windows XP CD
The error can also be because the SATA controller driver in BIOS is set to AHCI meaning an AHCI driver is needed if available. So check that setting in BIOS setup. But you can't now change the setting to IDE mode because Win7 won't start.