First of all, here is a link to download the ASUS A7M266-D manual in PDF format:)
The CD/DVD must appear in the BIOS before it will be seen and used by Windows. There are two reasons it (they) might not be seen. There is a jumper pin block on the back of each CD/DVD to designate Master, Slave or Cable Select. you must move the little plastic jumper clip to the correct position. If you are using a 40pin IDE cable, the top drive should be Master and the bottom drive should be Slave. If you are using the newer, smoother 80pin cable then both should be set to Cable Select. Having the jumper in the wrong position will prevent the IDE controller from sensing one or both of the drives as the signal will get confused in the cable.
Next you have to change a BIOS setting to inform the system that you now have a new device on that channel (unused channels are usually defaulted into the NONE or AUTO position so you do not get a device missing error message on startup). This is where the manual comes in. The specific instructions for the Award BIOS in you system are found on page 48 of the manual.
If you are just replacing the original CD/DVD, it should be in the Secondary Master channel. If you are adding a second drive then your new CD/DVD will be in the Secondary Slave channel, which you should change from NONE to AUTO. You will have to reboot for the change to take effect. Go straight back into the BIOS to verify that the added drive is recognized (the BIOS should list the drive type and information). Once you can see it on the BIOS screen, Windows will recognize and automatically configure it.
Now, as for your Windows saying the drivers are corrupt, that is a different problem which usually happens after removing software to burn CDs/DVDs. It is not an uncommon problem. I believe a link that describes your problem and solution is here:)http://www.pchell.com/hardware/cd_drive_error_code_39.shtml
Finally, you mention XP Professional like you are going to reinstall your hard drive. It may not be necessary unless you are doing it "just because". If you have/had XP Home on the hard drive, you will have to do a full installation for Professional, you will lose all data and programs, AND you will need to locate the correct drivers for your system to get all the pieces to work. You will also need an XP Professional COA to activate the new operating system, as you cannot activate Professional with a Home edition key.
For most users, there is no advantage in using Professional over Home edition (there are some new features used for networking, remote desktop, etc. that single machine home users just do not have reason to use). If you are installing Pro just to fix your DVD problem, it is probably unnecessary.
Please comment with your results.