Sigh... another bites the dust.
ME does not recognize NTFS. Win95, Win98, and WinME cannot use NTFS. Any format of NTFS or installation of XP on NTFS will kill your Win95, Win98, or WinME completely. You MUST use FAT32 if you plan to use one of the older MS OS's.
To fix this, you will have to reformat the entire drive as FAT32, install WinME *first*, then install WinXP Pro. However, I don't recommend installing them on the same partition - that will kill both OSs eventually since they will use the same Program Files directory.
But if you plan on using WinME, you cannot use NTFS, period.
--Alexander