New 1TB green caviar; computer not recognizing full capacity

I tried doing a fresh install with a xp, but the dos only recognizes 130gbs. Even as a slave drive the drive only shows up as 127gbs…

Is this XPs limitation? Also do I need bios upgrade?

You probably have a Bios drive size limitation.  See if you can download a Bios update that will allow you to use large size drives.  You will find that with your pc or motherboard manufacturer.

The original version of Win XP was limited to 28-bit LBA support. This means the maximum drive capacity was 128GiB / 137GB.

You need to install the Service Packs for 48-bit LBA support. SP1 is sufficient for this.

See the following articles.

How to enable 48-bit Logical Block Addressing support for ATAPI disk drives in Windows XP:

Large Hard Drive Support (48 bit LBA) - 137 GB plus for Windows XP Home and Professional: