Why mess with Norton and all sorts of tweaking/set-up. Just use Avast Home(
www.avast.com) and spybot (
www.spybot.com). Both are free solutions and work very well.
If the external hard drive cannot be connected, there is probably something wrong with it, have it replaced under warranty. There is no reason why XP would not recognize the drive. It could be hardware, i.e. the drive is a USB2.0 connection while the older Dell computer only has USB1.1 ports?