How are you doing with this problem?
As Mishcabob outlines, the problem could originate in a bad bios setting, or a problem with the hard drive itself.
The checks he recommends are pretty much mandatory first passes at each of these.
I would suggest careful inspection of your BIOS settings first, to make sure they are properly set to attempt an autodetect of the hard drive. The fact that your machine will not detect other hard drives might - but not conclusively - indicate a problem with BIOS settings.
Isolate the HDD by removing other devices from the cable it is on, and see what if any error messages are returned when you start the machine. Have you been getting error messages? If so what are they?
You mention indirectly your CD drive will read when the HDD is not installed. Can we assume it is NOT on the same cable with the HDD when that is installed?
Is your BIOS set to automatically seek the CD, in the event that the OS does not load from the first (HDD) device? If not, change that setting so that it is, at least until this is resolved. (You report that the CD is not detected when the HDD is present, but that may change if you set the BIOS to look to the CD for its boot instructions before looking to the HDD.)
If you can get the CD drive recognized when the HDD present, you may be able to use the Recovery Console to start your machine. This should allow you to do additional diagnostics and repair. Here is a copy of "HELP" material on the Recovery Console from an XP installation:
To start the computer and use the Recovery Console
From the Setup CD-ROM
Insert the Setup compact disc (CD) and restart the computer. If prompted, select any options required to boot from the CD.
When the text-based part of Setup begins, follow the prompts; choose the repair or recover option by pressing R.
If you have a dual-boot or multiple-boot system, choose the installation that you need to access from the Recovery Console.
When prompted, type the Administrator password.
At the system prompt, type Recovery Console commands; type help for a list of commands, or help commandname for help on a specific command.
To exit the Recovery Console and restart the computer, type exit.
Important
Because the Recovery Console is quite powerful, it is recommended for use only by advanced users or administrators.
Once you have access to the machine - you have accessed and validated BIOS settings, the machine is detecting the CD drive whle the HDD is present, and you have the recovery console working - You may be able to load and use disk diagnostic programs, such as SpinRite from GRC.com
SpinRite is claimed by Gibson Research to recover data from many drives - but you have to be able to access the drive to at sufficient level to run the program.
Let us know how this is going for you. I have not had time to do much research on the items I mention here whle preparing this post, but may be able to do more if you provide additional information and confirm the need.
Good luck.