with my Laptop that came with Vista (and now has 7 on it as the main OS) the drive is SATA, as was the controller mode.
Therefore, when I reformatted it and started over with everything and installed XP 32-bit and 64-bit, I needed to change the mode to "compatible", otherwise XP would blue screen when I booted. Once I changed the option, I was able to boot and install the SATA drivers, reboot, turn the SATA mode back to AHCI and now they boot fine.
I have no idea what effect it would have changing from SATA mode to compatible mode, though. Basically, to switch from "compatible" to using SATA natively you need to appropriate windows XP SATA drivers. you can install them first, and then reboot and change the BIOS option. if it doesn't work you should be able to simply reboot and switch back to "compatible"... but don't hold me to anything if you try, I really have no idea.