I don't think SATA was around for win 95, so I do not believe it will work on that. I believe there is a maximum size for a FAT 32 formatted disk which is 4GB, which could be your problem
Window XP: Have you tried going into the BIOS and setting to run from CD first (Normally just set the defaults)
The CD should start loading the software, when you get to the blue screen (terms and conditions), press F8 then ESC to get into advanced mode.
From there you can partition and format the drive,and XP should do this and then continue loading the system.
There is also the possibility that the cables are not connected firmly enough or the motherboard has a fault.