Are you intending to install Knoppix on this drive as well as XP?
If so, I suggest you partition it now since it is MT. Use windows fdisk. Make 4 partitions, one primary formatted NTFS for XP operating system. The rest of the disk then becomes 'extended partition'. Make three logical partitions on this, one about 3.5 gig for Knoppix O/S, one anout 0.5 gig for Knoppix swap. All the rest for data. Format all these partitions VFAT (fat32) for now. The Data partition will stay VFAT & can be shared by both Linux & XP, the other two will be changed to Linux formats during the Knoppix install. Chances are that your disk 'error' will be corrected by the partitioning process. Install XP first, then Knoppix & you will be able specify which partitions to put Knoppix on during the install process. Use 'ext3' for the Knoppix filesystem type, not ext2.