That's a known issue with Windows XP. In order to access more then 131gb of data your hard drive controller AND your operating system needs to support 48-bit addressing. The Windows issue is fixed with SP1, so if you slipstream that into your install, you won't have a problem.
Another way around this is to only create a small boot partition, say around 10gb or smaller, that you use only for Windows and no applications. Then once you are in Windows, update completely including SP1, and then create the last partition(s) to fill up the rest of the space.