Congradulations.
There's nothing wrong with your harddisk.
This is just because the C partition is too large.
You can use partition magic or anything else to resize the partition to say...4G?or just 2G...It doesn't matter,and then you can try to install xp on C.and after you have xp installed,you can resize the C again with some partition resize tools under windows or DOS.
Enjoy it.