hi siobhan
this sounds like a common issue with all kinds of external hard drives and for the life of me i cant find the reasons(or the solution) for it
i had a freecom 80gb external drive which stopped working one morning,and since that its never worked again,i did everything,formatted it,i even opened the caddy and replaced the drive with a new 120gb drive and still windows refuses to recognize the drive and the device manager just gives a "code 10" error
code 10 is a error code specific to usb devices like hard drives and memory sticks,it states you need to uninstall the device and reboot windows so windows can re-recognize the device and reinstall the appropriate drivers and firmware
and as usb devices in windows xp dont require specific drivers you cant download any other drivers
there is one option open to you,theres a website called "live update" that will update the firmware to dvdrw/cdrw drives,no you may be able to find a solution there such as a update for your external drive,its a long shot buts anythings worth a go
go to the manufacturers website for your drive and see if they run a live update
hope this helps,any problems let me know
good luck siobhan !