Hi
As you probably did, I looked around and found a few other people who had similar problems but none of them had a solution posted.
The ones I found were a long time ago, like 2002.
I haven't run XP on anything in so long I can barely remember it, but I'd guess that as Ussnorway said, Windows XP never imagined a 1TB hard drive just as it couldn't have handled 32 Gigabytes of ram.
It probably just doesn't know how to show that much disk space so it does something weird to compensate.
This is totally a guess.
Mike