The PC would not recognise the hard drive when it restarts.
I eventually discovered that the bios recognised the hard drive if the PC was completely powered down rather the just restarted.
The "Fast Track" booting program detected the new Western Digital and the old Sea Gate 120GB I had left to fill the second space which led me to believe the Master HD was the only one that was fried.
Now, the Fast Track can detect both HDs, setting the BIOS to either RAID or ATA mode.
Humoring the error message (considering during the beginning boot of the laptop, 1023MB RAM pass in the load up) I switch both RAM chips out of the Alienware and swap them with the 2 RAM chips I have in my Acer Aspire 5100 laptop.
Retrying to install XP, I get the same identical error.
During windows XP installation the installer does a software restart resulting in the bios not recognising the hard drive. Instead of letting it reboot, I simply powered the laptop down completely.
When the PC needs to restart try pressing the power off button, then pressing it again to restart once the system is completely shut down. Then when I powered it back up, it went into Windows XP and continued installing just fine.
The laptop's original problem was the hard drive was not being detected.
The Alienware runs off Pheonix c ME First BIOS Notebook Pro Revision V146 1.00.08 build date 2005/01/06.
On the Main screen of the BIOS, It shows the System Time and Date, IDE 0 Optical Device and IDE 1 Optical Device, and installed memory.
This is a note for myself and anybody else who finds themselves frustrated when it comes time to reinstall Windows XP on their Alienware laptop with RAID (this advice applies to more than just the M7700).
Basically, the behavior I ran into was that I would boot to the Windows XP CD and it would ask me if I had any drivers, press F6.