*** STOP: 0x0000007B error when trying to install WinXP

I attempt to do fresh install of winXP SP3 on my computer.

My hardware configuration is as follows:
Intel Pentium 4 540, 3200 MHz (Hyper-threaded)
Abit AA8-DuraMAX/AA8-3rd Eye (Intel Alderwood i925X-ICH6R)
Sound: Intel 82801FB ICH6 - High Definition Audio Controller [B-1] (integrated with motherboard)
1024 MB (DDR2-533 DDR2 SDRAM) (4 sticks)
NVIDIA GeForce 6600 GT
Hard drives:
1. Seagate ST3200826AS (200,05 GB)
2. WDC WD1001FALS-00J7B1 (1000,20 GB)
Controllers:
1.Intel(R) 82801FB Ultra ATA Storage Controllers - 2652
2. Intel(R) 82801FB/FBM Ultra ATA Storage Controllers - 266F
NEC DVD_RW ND-3540A (IDE)
Floppy

I installed additional HDD WD Caviar Black 1TB (WDC WD1001FALS) which has been immediately recognized in BIOS and WindowsXP, I divided it into two partitions and formatted without a problem in disk management. I intended to install Win XP on this new drive and format current system partition (on my Seagate HDD) afterwards in order to try some linux distros.
First time I popped in WinXP installation CD I have got without a problem to the point where I can choose which partition I want it installed on. As I wanted drive letters to be assigned differently I decided to quit installation and changed boot order of the drives in BIOS (WD being the first). I realize now I would not have achieved what I wanted but it does not seem to matter now.
When I popped in an installation CD for a second time it ran fine until the point when it says “setup is starting windows”, it went black for a few seconds and then I got BSOD with the following message:

“A problem has been detected and windows has been shut down to prevent damage to your computer.
if this is the first time you've seen this stop error screen,
restart your computer. if this scren appears again, follow these steps:
check for viruses on your computer. remove any newly installed hard drives or hard drive controllers. check your hard drive to make sure it is properly configured and terminated.
run chkdsk /f to check for hard drive corruption, and then restart your computer.
*** STOP: 0x0000007B (0xF7C79524,0x0000034,0x00000000,0x00000000)”

In this case I went back to previous BIOS settings but they didn’t work any more.
In the attempt to solve the issue I unplugged Seagate drive, leaving formatted WD alone with the same result.
Thinking there is sth wrong with it I unplugged WD and plugged Seagate in. The same. There are 4 SATA connections on my motherboard. I tried different combinations of drives and connections to no avail. Each time drives (or drive if I tried only one of them) are recognized correctly in bios. I checked drives for viruses using Avira AntiVir PersonalEdition Version 8.0.1.30 with latest updates.
Then I fully zeroed WD drive using WD’s own DOS utility for that purpose to exclude possibility of any virus and tried it again on its own.

I checked memory using memtest86+ and it found no errors.
I did long test of Seagate drive using Seatools for DOS – no problem
Before zeroing WD drive the quick test was performed (using WD utilities for DOS) with no problem found – I did not ran long test though.

My BIOS: Phoenix Technologies, LTD 6.00 PG 03/23/2005 –it’s ID number checked in flash menu is 22 with 26 being the highest according to Abit website (In the list of improvements in higher versions than mine there is no mention about hard drives) I have never flashed the BIOS before an prefer to avoid it if it is possible.
I have originally sata set to ide in BIOS and in enhanced mode and I wonder if setting it to ahci (sth I read about for a first time yesterday, but since both my drives support NCQ maybe I would benefit somehow from it) would help (I know there would be I problem with loading current XP install but I am not bothered as I was going to scrap it anyway)? Can I use ahci mode if my CD-ROM is IDE?

I have no problem booting my current install and WD drive was recognized straight away (obviously as an unpartitioned and unformatted drive after zeroing it).

Whatever I did all my attempts to ran the install ended in the exactly the same way. Wherever I read threads about these errors it seem people had them from the very beginning so I don’t understand why I got to the windows wizard at the first time, but could not get there any more even with the same settings as at the time when things seemed to run ok. Maybe I have shown some ultimate stupidity by changing HDD’s priority boot order, but I don’t know how that could compromise every other attempt to run the installation. I recently added the same drive (just smaller capacity) to my friend’s computer which was older and lesser spec, successfully installed XP and found no problems I couldn’t overcome. Now I am out of the clues.

This is my first post and I will greatly appreciate any suggestions how to solve the problem.
Thank you very much in advance for any help.

Ps. I do apologize for any spelling or grammar errors as English is not my native language.

 

Thank you very much for your kind reply. I was unable to play with the computer in the past few days, therefore sorry for the delay with updates on my (lack of) progress. I have reset the bios by loading optimized defaults, then fail-safe defaults, then cleared it using jumper on the motherboard. After each resetting of the bios I tried installing xp firstly in ide mode without loading any sata drivers. Than I set it to ahci mode and pressed F6 to load 82801FR SATA AHCI Driver. Each and every time WD drive was on its own. Did not work. I tried with my old drive on which I have a system with the same outcome. Every single time wherever I plugged any of the drives it was correctly recognized in BIOS. I think about flashing the it but in the release notes for newer versions than mine there is no mention about anything what would solve the problem. Maybe I am missing something, but have no clue at present what to do. It worries me as one day I would like to become A+ certified (still lot of material to go through, my knowledge is really poor) but can not even sort out my own computer.
Thank you for any help.

 

Did the HDD come with an install CD to set it up? If so try running it. I am still a bit leery of using the new high volume HDD's, but did purchase one WD My Book External @ 1 TB. No real problems, just doesn't auto shutdown with computer from Linux OS, just Windows.:duck