Holy crap - what a pain. Could Microsoft make it any more difficult to do a fresh install of Win7 on an older PC? The POST sees my drives. The BIOS sees my drives. DOS utilities see my drives. An older OS (WinXP) see my drives. But Win 7 cannot, or could not, until I did the following (in no particular order). What a pain!!!
1. unplugged all unnecessary drives. In other words, I unplugged a 2nd CD drive. I unplugged a striped RAID array. I unplugged my floppy/CF card reader. I left just the primary CD drive (where my Win 7 install disc was) and a single 500 GB WD SATA drive.
2. tell the BIOS that the 500 GB SATA drive is SATA, not IDE (as I had tried before, unsuccessfully).
3. run DISKPART from a DOS command window, from within the Win 7 Install environment ( <shift-F10> ), as described by ignatzatsonic above
run diskpart command from a prompt.
Then each of these commands, followed by the enter key after each one.
list disk (to show the ID number of the hard disk to partition, normally Disk 0)
select disk 0 (change 0 to another number if applicable)
clean (this deletes all partitions)
create partition primary size=80000 (creates a partition with 80 GB space; to use the entire disk as one partition, omit the “size=value” parameter switch; use a similar command to create more partitions if needed or create in Windows 7 after installation)
select partition 1
active
format fs=ntfs quick
exit
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Loading drivers from a USB drive from the motherboard manufacturer didn't help at all.
After finally getting Win 7 Ultimate installed and running, my power supply quit, and the PC wouldn't start at all. Nada. Replaced the power supply, now all I have to do is purchase a full version of Win 7, or re-install WinXP then re-install Win 7, 'cuz the re-partitioning and reformatting of my drive killed my XP installation, nullifying my Win 7 Upgrade license.
FUN!