Changing the SATA setting in the bios didn't fix it for me. However, downloading the tool here worked.
http://support.microsoft.com/kb/2755139
1) Rip your windows installation/recovery CD into .ISO format. I downloaded the trial version of Alcohol 120% for this.
2) Use the windows boot USB/DVD tool on the .ISO file. (http://images2.store.microsoft.com/prod/clustera/framework/w7udt/1.0/en-us/Windows7-USB-DVD-tool.exe)
3) Start up the machine to be formatted as normal (with the installer disc inside). Go through the process until it gives the error message.
4) Once the message "A required CD/DVD drive device driver is missing. If you have a driver floppy disk, CD, DVD, or USB flash drive, please insert it now." is shown, press "X" at the top right of the window to cancel the installation. This will cause the installer to exit to the first menu.
5) Remove the installer disc, and insert the prepared USB drive. Go through the process again, and it should install this time.
5.1) Some people say that it might still report the same error message. In that case, try coming back out to the main menu again, but put the USB drive in a different port instead.
Credit--this guy: http://www.youtube.com/watch?v=YuC83DEdwu0