Did you use the Windows Hack Tools to format and partition the drive? XP should see all (or most, actually) of the 250GB, if it has been formatted properly.
I've got the same drive and XP SP3 sees all of it with no problem. (However, I can also warn you in advance, the drive will NOT work with Phatnoise software, except maybe the old Music Manager software. It only works with VorTechS' Phathack Media Manager.)