IIRC even a USB drive in HDD mode with the appropriate drivers (they were different based on chipset) will work. It's been a long time since I've done it, but I

IIRC even a USB drive in HDD mode with the appropriate drivers (they were different based on chipset) will work. It's been a long time since I've done it, but I remember installing the AHCI driver from a USB drive or even a partition on the internal hard drive. Later on I found you could integrate the driver into the WinXP installation CD itself.