Since Windows NT4, I always installed NT the same way: create a FAT32 partition on the C: drive, format it, copy the \i386 folder from the NT installation CD and start winnt.exe from C:\i386. It always worked for me that way until today, with NT4, 2000, XP and Server 2003.
I have a brand new HP Compaq dx2200 desktop with a 80 GB SATA drive. I create a 80 GB FAT32 partition with Smart FDISK (from the very nice Hiren's boot CD) and copy the \i386 folder from a XP with SP2 CD (from HP) and start the winnt.exe. It goes through the first part of the setup OK, but at the first reboot, "operating system not found".
I format the FAT32 partition again and "sys c:" from a Windows 98 boot CD and same thing, "operating system not found" even though I can access the partition and I see that command.com is there.
I create a 5 GB partition, format it as FAT32, "sys c:" from my trusted Windows 98SE boot CD, copy the \i386 from the HP Windows XP CD, start winnt.exe and all the setup goes well. No need for the F6 part. I have a fully functionnal XP Pro, on a 5 GB partition.
I resize the partition with Partition Magic 8, again from Hiren's Boot CD, to 80 GB. It warns me that the partiton will go over 1024 cylinders, so that it may be unbootable, but it works with XP. I **think** that it is the reason why I cannot do as usual, DOS (and the DOS part of XP setup) can't "see" the 80 GB partition because of the 1024 cylinder limit.