Fixed the problem! The BIOS SATA configuration was set to AHCI mode, I needed to change it to SATA. The real problem though was getting past the BIOS password.
Apparently Latitude laptops enforce a created BIOS password by ensuring it cannot be erased, even by removing the CMOS battery. I tried calling Dell but since I am not the original owner I could not request a master password. I had to take the service tag found in the BIOS when asking for a password (11 characters I think), and use a dell master password keygen to get in. It worked and I changed the setting, thus allowing me to install Windows XP.
I hope this helps anyone in the future with a similar problem.