If you can boot into windows xp do so with the usb drive hooked up.
Go to the start menu and click run. Type compmgmt.msc and click ok.
To the left you will see a tree click on disk management.

I could sit here and run through the whole process but there are simple instructions from microsoft here. If you don't understand them just repost.
http://support.microsoft.com/kb/309000/