Cannot create recovery point set

I recently did a clean install of Windows XP SP3 on my computer and then installed Ghost 14 to backup to an external Western Digital USB hard drive. My problem is when I try to define a backup it won't let me select the recovery point set option because "the drive you have selected is not mounted". This installation is only a few days old, and when I installed Windows I made sure that all the external USB hard drive was not connected. I only have one partition on my boot drive, and it's a 160 GB Western Digital WD1600AAJB EIDE drive. The drive shows up in explorer as C:, however disk management says no drive letter is assigned to it and when I try to assign a letter it only lets me select g thru z. How do I go about mounting the drive so I can use the recovery point set option? I had an online chat with an analyst and he said it won't work because of some setting on my drive and he didn't know what it was. Thanks in advance for your help.

 

Mike