I assume this is a new hard drive you've rigged up, so in order to access it you need to create a partition which you then format. The link above contains detailed instructions on how to do this in Windows XP. ;)
Actual bad sectors or possible partition errors? I'm not sure what Seatools tests for but you could just have a corrupted paritition. If there's nothing worth recovering then perhaps a zerofill utility could give you a working (albeit blank) drive.