Zimdesign, this happened to me when I had DISABLED "ACPI" option in BIOS. The Windows XP was installed with only Single core detected. I enabled it, and next time I had a clean install of Windows XP, it detected both the cores by it self. Depends on your BIOS, check under Power for the said option. There also might be option such as use both the cores or single core in your BIOS, so make sure to check that too.
Also, right click on My Computer then Properties > Hardware > Device Manager > Processors
Do you see two processors listed there or one only?
Make sure you Enable ACPI option in BIOS. Then do a Repair install of Windows XP and things will work fine. Or Enable ACPI support, and if Windows XP boots check to make sure you see Multiprocessor under COMPUTER in Device Manager. If not, whatever you see there, right click it, update it's driver and select I will choose from a list, then look for Multiprocessor there.
If still no luck then you can force Windows XP to install the Multiprocessor driver by pressing F5 (I think) on the very initial screen of Windows install where it asks you to press some function button F2 I think to install Harddisk controller driver from diskette. When the list appears, scroll up and select Multiprocessor. I was not able to do this step, Windows setup would just go stuck after I chose Multiprocessor as ACPI was disabled in BIOS.
As soon as that was enabled, things went fine by themselves.