1) In BIOS set first boot device SATA. Note, this is after you load your OS. Don't forget to load your SATA drivers by hitting F6 when prompted.
2) IDE should be by itself.
3) Yes, the XP formatting will be fine.
4) First partition should be 10Gb. This is plenty for your OS and any future updates. One 40Gb for programs and storage for small files. 2-100Gb partitions one for large programs like games. The other for large file storage like vids, pics, and audio. The 160 I would set up as 2-80Gb partitions for additional storage.
5) NFTS is more secure than FAT32.