I suspect since it was a used drive that on your latest attempt what happened was XP didn't set up the 2 partitions, rather it picked up the existing ones...
I would travel to bootdisk and grab a WinME boot disk and do the following.
Boot from the WinME floppy; at the A: prompt type fdisk and hit enter.
You will be given 4 choices; Create a logical partition; create an extended partition; delete a logical partition; and view partition info.
Choose view and make sure you are working on the correct drive. "Warning" from here on the choices you make are going to destroy the data you have on that drive/partitions.
Making sure it is the WD drive you want to first delete any extended partitions ( given your info there will be 2 partitions on the WD drive. After deleting the extended partition you then want to delete the Primary partition.
Re-boot to the floppy and let it pick up your drives again.
Again MAKE SURE you are working on the correct drive.
Choose Create primary logical partition...in the next window it will ask for a size choose 100 % and let it do its job.
Finally it will ask for a volume label just hit enter for none. Then set the partition as active, and re-boot once more to the floppy.
Format the WD again make sure you are working on the correct drive and you're done.
Re-boot and XP will now see a full 60G. HDD.
There is an excellent tutorial on using FDisk
Here...
Hope this helps...take your time and read all messages and you should be good to go. Approximate time: 1/2 hour to 40 mins.
patio.