This is written mainly for Google, hoping to save somebody some time.
I was helping a friend clean up a Windows machine — a Dell Dimension 8400 — and it was decided that the best road was to flatten and reload, but after getting the reinstall disk from Dell, it would repeatedly bluescreen with a STOP 0x0000007B error. A replacement OS reinstall CD from Dell didn't change anything.
Turns out this is related to infortuitous default RAID settings in the BIOS, which has what appeared to be a poor user interface for changing the settings. This machine had a single SATA drive and was not using any RAID configuration, but the BIOS was apparently trying to get RAID involved anyway.
The goal is to essentially turn off all the RAID features, but there isn't a way to do this directly: instead, one must point the RAID settings to the unused controller to get it out of the loop. Expanding the Drivers icon, there should be a setting for RAID: change it from RAID Autodetect/AHCI to RAID Autodetect/ATA. There really should be a setting RAID Off.
Do insure that the hard drive is in the boot order, then reinstall XP; it should now work normally.
Note that the Dell reinstallation CD doesn't appear to have the NIC drivers, so it's helpful to download them in advance as well