Making Athlon64 Work

Have assembled a system with Athlon64 Fx53 CPU/ASUS AV8 MB/2GB of 400MHz DDR RAM.
Could install and run Win Me on a Seagate 120Gb ATA133 HDD.
However, cannot install either Win Me or XP Pro on a Maxtor 250GB ATA 133 HDD.
Win XP 64 -bit edition did install but not a single driver could then be installed.
Are not the CPU and the OS supposed to be backward compatible and run all x86 apps?
What are the steps to make this expensive system sing? Ultimately, I plan to install 4GB of RAM and 250 GB SATA hdds in a RAID 0 array.
Main Application to be run- Microsoft Flight Simulator.