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Slight update, worked out that I was getting this:
"WinXP/fasttx2k.sys caused an unexpected error (18) at line 2113 in d:\xpsprtm\base\boot\setup\oemdisk.c"
It was because I didn't extract the Western Digital ZIP file straight to Floppy, I extracted to PC then copied the files over. Still didn't help though, once the driver had been selected using F6 I got the same error.
I've got the same board and had the same problem using WD Raptors. It's not the raid you need to worry about. It's the way ASUS has the IDE configuration set on this board.
I got this off another forum...
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The "red" connectors are for a seperate Ultra133 controller and you must use f6 to install seperate drivers. The "blue" connector runs off off of the ICH7R southbridge so you do not need drivers for it.
I connected the CD-ROM drive to the "Blue" connector. I still had the same error connecting just a cd-rom drive.
According to the manual you cannot connect just a CD-ROM drive to the blue connector. It must be slaved to an IDE drive (i.e. HDD then CD-ROM on cable).
Once I slaved my CD-ROM to an IDE drive I had laying around the office I was able to install my OS to the Raptor I had connected to the Red SATA.
After that, everything went fine.