1. There is a utility which you can download from HP which can format a USB stick as bootable to DOS, but you need access to the DOS boot files, so ideally an XP formatted floppy image (which you can also download as there are bootable floppy images on the net for most old windows operating systems).
2. Create a USB key which boots to WinPE - this has native support for SATA and is a much better all round solution for your kind of problem. Look in the Articles tab on Connect, and search for "Adventures in WinPE" which has the full instructions for creating bootable CDs, USB sticks, USB Hard drives - the latter being most useful as you can then copy off the entire hard disk if you need a backup.