Alright guys, since nobody else took the time to do this, I will do it.
DEALING WITH AND GETTING AROUND THE SATA DRIVER ISSUE WHEN TRYING TO INSTALL WINDOWS XP ON YOUR VAIO TZ MODEL - OR ANY OTHER MODEL FOR THAT MATTER
There is a thread titled this on notebookreview.com but its far too complex.
The process was mentioned by a few people in this thread, but their "one liners" with zero information made the suggestions fairly useless.
So here goes: Yes - the proper suggestion is to "Slipstream WinXP Service Pack 3".
But how does one do that?
1) Download and install NLite from here: nLite - Deployment Tool for the bootable Unattended Windows installation - Download
2) Download Windows Service Pack 3: Download details: Windows XP Service Pack 3 Network Installation Package for IT Professionals and Developers (just click the download button - make sure you save it to your desktop)
3) Get a blank DVD-R or CD-R
Load up NLite
1) First screen with Language showing on it, click next
2) "Locating Windows Installation" screen, click browse to your CD drive where you've put your Windows XP disk.
3) Popup will appear: "Select where to save the CD installation files..." Browse to a newly created folder on your hard drive and select it. (This is where it will put the entire WinXP + SP3 combo, which you'll later burn to a blank DVD)
4) It will then copy the contents of your WinXP disk to that directory.
5) When it finishes, just click "Next".
6) Ignore the "Available presets" page and click next
7) On the next screen click the "Service Pack" button and the "Bootable ISO" button. Click Next.
8) Next screen you can identify the location of the service pack 3 file, which is on your desktop. Click "Select" and browse to it. It will combine the SP3 and WinXP on your hard drive, in the directory you created.
9) Put your blank DVD R or CD R in the drive.
10) Go to the next NLite screen. Under "mode" click "Direct Burn". Then click "Make ISO" button. It will burn Windows XP + SP 3 onto the disk.
Use that disk when you boot up your machine, boot from the disk, and it will completely load WinXP for you.
Problem solved. Someone post this all over the web please. im too lazy after 3 days of trying to find someone else who wrote it.