Please walk me through sata installation and xp partition

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ok. i purchased a western digital 320g hard drive and am attempting to install. my computer recognizes the drive but when i get to the partition screen, it has 2 unpartitioned spaces. 1 of those spaces has a 76mb capacity and 1 has a 131 mb capacity even though i am installing a 320g drive. the second issue is that it is showing a previous install of windows(i think) on my d: drive. i would like to totally wipe everything out and start new. i formatted the drive i installed onto the 131 mb unpartitioned space hoping it would recognize the 320g after it formatted but it didn't. it loaded windows onto the drive and now the windows screen where it loads just stays on and never goes to a desk top. i think i really screwed it up this time
 
thank you for the reply. this is what i am attempting to do but there are glitches it seems. when you get the partition screen, it has 2 unpartioned mbr spaces. one that says 76mb and one that says 131 mb. i need to totally wipe these out. also, when i get to a command prompt, it says that i have files on my d: drive and that there is no c: drive. in my bios it shows the new hard drive and it shows that it is indeed 320g. then after all of that, i installed xp and now it only goes to the windows xp loading screen and does nothing.
 
Yes, follow the guide and remove both Partitions, one at a time

Note: Some older computers required a Bios update to see larger hard drives
If this is an older computer, you may need to check your Manufacture support driver website for any new Bios updates (the Bios update should be done before installing Windows)
 
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